Is it time to stick a fork in bitcoin? The digital currency has been making the news for a couple of years now. Yet, many are taking a step back and wondering whether bitcoin as we know it will still be around in the future. Wences Casares from Xapo, Nathaniel Popper (author of Digital Gold), and Bobby Lee from BTCC (formerly BTC China) took the stage with our own John Biggs at Disrupt SF to talk about our favorite Internet currency.
“It’s the best of times and it’s the worst of times,” Bobby Lee said. “We actually have a digital asset class that is fully decentralized and trustless. I think it’s going to be interesting ahead in the next two years.”
Lee wasn’t the only one who believed that we’re in a lull right now. But there are also a few positive signs — investors are making smarter investments, entrepreneurs are building solid products.
“I see much better investments and infrastructure right now. We’ve attracted a lot of interest and capital in a very short period of time,” Wences Casares said. “Everyone’s expectation was that it was going to change in 6 months and it’s taking longer than that. I can imagine things could get worse before they get better.”
So why didn’t we experience an overnight money revolution? As always, it all comes down to use cases. “Bitcoin has been a reminder about what money is. Money is about trust. Bitcoin was initially sold as a trustless system. And I think that’s why it was attractive for a lot of people,” Nathaniel Popper said. “But for people to use it as money, they have to trust it. If there is a problem with the code, if the cryptography behind it is vulnerable, it could become worth much less. On the other hand, there are a lot of people putting a lot of money into it right now. The flaws will be corrected and there is still somewhere to go.”
But it doesn’t necessarily mean that bitcoin is an immature protocol. In fact, Casares thinks the opposite. “You can always hack a service on top of the protocol. But if you have a problem with your webmail provider, it doesn’t mean that the email protocol is broken,” he said.
For instance, Xapo makes sure that your bitcoin private keys are safe by keeping them offline in vaults — the main vault is in Switzerland. So now that we have mature service providers that take security very seriously, we need to find out why we need bitcoin and the blockchain.
The blockchain is great if you want to build an identity layer for the Internet. The value of bitcoin itself could raise drastically. And of course, bitcoin is a great way to send money over the Internet. These are very different use cases, so it’s going to be interesting to see what is going to take off first. But it looks like bitcoin is not going anywhere just yet.