Jay Krishnan, the ex-CEO of T-Hub, India’s largest startup incubator & venture advisor to SRI Capital, thinks bitcoin has failed due to $20 transaction fees. Although his claim of $20 doesn’t stand that strong as since December, for over nine months, the median transaction fee of Bitcoin has remained below $0.2.
It was in December 2017, that the Bitcoin and other major cryptocurrencies like Ethereum, Ripple, and Bitcoin Cash raked their all-time high value. Since then the digital assets have rolled back on itself and still continues. In an article published in the local publication, Economic times, Krishnan said that the biggest cryptocurrency failed due to its inability to address unprecedented levels of transaction activity and demand in December. He states:
“The fallacy of Bitcoin as a currency is its transaction fee which is typically above $20. The transaction fee is paid to ensure convenience and security in the exchange. This is not only higher than the transaction fee paid for regulated currency but is also an indication of the security risk it holds.”
Krishnan a prominent cryptocurrency representative in one of the biggest markets in the world in terms of population and market size, has quite the contrary stance from other world-renowned venture capital firms like Andreessen Horowitz. This week, Ben Horowitz, a legendary investor and one of the most successful ventures capital investors spoke at the TechCrunch Disrupt conference and stated:
“I think that there is probably more developer activity in crypto than in anything we’ve seen since the Internet and the right way to think about it is, it’s a new computing platform. Once every decade or two, a new computing platform comes along. The thing that is deceptive about is that when the new platform at the time is generally worse in most ways than the old platform but has some new capabilities.”
Crypto might have had seemed more inefficient and impractical than legacy systems during its onset. Since then, their decentralized nature has enabled the development of apps that were not possible before. Horowitz added that almost all new computing systems have this deceptiveness at the start and at the start they seem worse in most ways than old platforms.
Agreed that cryptocurrencies still have a long way to go and there are indeed many roadblocks in their wake. But it needs to be taken into consideration how far they have come already. It is quite easy for haters to find arguments to dismiss the emergence of disruptive technologies.
Back in 2007, Analysts condemned smartphones and deemed them more inferior to computers, we all know and maybe holding the counter-argument in our hands. It is important to give space to disruptive technologies to explore their potential to create applications that have not existed before, such as consensus currencies like Bitcoin.
Even though bitcoin’s transaction fees are currently less than $0.1, it could be considered high by many. To things in perspective, upon comparing the fees involved in using offshore bank accounts to store money, $0.1 seems much lower than tens of thousands of dollars required to transfer millions of dollars.
While Bitcoin battles with a bear market, the increasing support for investment firms like Citigroup, Andreessen Horowitz, Goldman Sachs, Morgan Stanley and government agencies’ acknowledgment are proof enough to put bitcoin on the maps of our future.
Read more: Citigroup, Morgan Stanley’s Roadmap Shows Institutional Demand For Bitcoin is Surging
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