Last Updated : Jan 24, 2019 02:08 PM IST | Source:

After bitcoin’s 2018 collapse, blockchain expert says virtual currency headed to zero

Experts are more interested in various applications of blockchain, bitcoin's underlying technology, rather than bitcoin itself.

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Bitcoin has headlines over the past two years, thanks to its 2017 rally – when it went up 13 times -- and its subsequent bust in 2018, in which it lost nearly 75 percent of its value.

Now, one expert on blockchain, the technology on which the cryptocurrency is based, says bitcoin may go to zero.

"I do believe it will go to zero. I think it’s a great technology but I don’t believe it’s a currency. It's not based on anything," Jeff Schumacher, founder of BCG Digital Ventures, told CNBC during a debate on the future blockchain in Davos, Switzerland.

Schumacher is a big investor in blockchain-focused companies.

Also read: Bitcoin bears: As the cryptocurrency tanks, these experts are having the last laugh

Hutchins and other panelists including 500 Startups Partner Edith Yeung, and Brad Garlinghouse, CEO of Ripple, however, synonymously agreed that their focus as an investor is on the underlying technology known as blockchain.

"I am much less interested in investing around bitcoin as a currency unit or a currency equivalent, or even the blockchain as an accounting ledger. I am thinking much more about the protocols. In other words, what is the underlying protocol going to do as a consequence of which, which tokens are valuable or not," Hutchins said.

The blockchain technology works as a decentralized public ledger of activity that is not owned by any individual. Instead, it is maintained by a network of people running specialized computers to solve complex cryptographic problems.

Listen: Podcast | Editor's Pick: Bitcoin — a cryptic story

The industry is now trying to create "open decentralized systems," which would essentially be next generation protocols or infrastructure that businesses could run on, similar to cloud computing today, according to Schumacher.

With the next generation of blockchain technology currently being developed, Yeung said that she sees blockchain adoption happening quickly in the area of payments, particularly in Asia.

"Many developing countries, where just to start with they don't even have credit cards, there's no particular infrastructure, it's almost easier to see sort of blockchain-enabled payments, to see in Asia, you will see more action happening in Asia more than US and Europe," Yeung said.

Also read: DATA STORY: India houses the second largest pool of blockchain developers in the world

The top investors expect more widespread adoption of blockchain in about three to five years.

Hinting at a shift in people's perception about blockchain in the coming years, Hutchins said that ultimately, consumers will not be talking about what blockchain is being used, they will just care how good the use case of a product is.

"When you send an email out today, you don't think about the underlying technology you are using … So you can hear us talk about … what protocol, what token, what technology solutions, how many transactions per second, but eventually what's going to happen is if you are going to put something of value in, something of value will come out the other side and you are not going to care what the underlying technology is," Hutchins said.

This would indicate the success of adapting the new blockchain technology, he added.
First Published on Jan 24, 2019 02:08 pm
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