“In 5 Years If You Use Fiat Currencies, They Will Laugh At You” – Says Tim Draper
Tim Draper had bought 30,000 Bitcoins in 2014 for less than $20 million. Three years and several technological advancements hence Draper’s corpus is worth $215 million. Founders of tech startups are usually very farsighted in terms that they can perceive future developments much before other sense the same. This also holds true for venture capitalists. Tim Draper has a brilliant track record of leading investments in companies such as Twitter, Tesla and Skype towards profitable avenues.
“In five years, if you try to use fiat currency they will laugh at you,” Draper had stated during a WebSummit while sporting a tie having cryptocurrency logos on it. “Bitcoin and other cryptocurriences will be so relevant … there will be no reason to have the fiat currencies,” he added.
Bitcoin with its present market capitalisation of $120 billion is the grandfather of all the cryptocurrencies. In comparison a global fiat currency holds a value near $2 trillion range. Bitcoin’s price has hiked up by 700% since the beginning of 2017.
Draper’s DFG Venture Capital had been quite bullish regarding Bitcoin for a long time now. He had bought more than 30,000 Bitcoins in 2014 which were put up for sale via a government auction of assets which were seized from the online black market known as Silk Road. His purchase was worth less than $20 million at that time but accounts for almost $214 million presently. Winning a heavy booty by placing just a single bet is bound to make people bullish about Bitcoin, Ethereum and similar cryptocurrencies.
Draper feels that fiat currencies are crippled by their stringent geographical boundaries. Once the border gets crossed, the Nigerian Naira drops by 30% and the Argentinian peso is treated as currency non grata. This also holds true for a large list of other countries. However the front tier currencies such as Euro and US dollar offer pretty great exchange value across global borders. Alex Kong, the CEO of TNG Fintech Group feels that currency exchanges lead to monetary losses. However with cryptocurrencies becoming a globally accepted store of value, such exchange related problems are expected to soon vanish.
But with new crypto forms being added to the market on a daily basis, problems might arise in exchanging one against the other. Draper addressed this issue stating that, “they’re all going to interrelate … and there will be exchange rates for all of them. My guess is that it will centralize around a wallet that you have, and when you pay for that Starbucks, your wallet will optimize to whichever currency has most value.” Bringing upon such changes surely wont be a simple process but smart marketing and technological advancements are sure to bring down the hurdle level.
“If it doesn’t get simplified it won’t get adopted … good marketing people will simplify all use of these things. And we might have a johncoin and a timcoin…we might be trading those in realtime, putting a value on our time and attention,” Draper said.
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