Speaking to CNBC’s Arjun Kharpal at a World Economic Forum, Davos panel discussion, the founder of BCG Digital Ventures Jeff Schumacher noted that Bitcoin would go to zero. He praised the technology aspect of Bitcoin but rejected its use as a currency. Others in attendance during the discussion were Ripple CEO Brad Garlinghouse, 500 Startups’ Edit Yeung and Silver Lake Partner Glen Hutchins.
Is Bitcoin Going to Zero?
Schumacher previously had said that Bitcoin would go to zero and when asked about his current views on the asset, he stood by his views. Schumacher noted:
“I do believe it will go to zero. It’s a great technology, but I don’t believe it a currency. It’s not based on anything.”
He said that if Bitcoin went on to go near to becoming the gold standard, it would be responsible for about 1/5th of the world’s carbon dioxide production. This will be because of the Proof-of-Work (PoW) model adopted by the coin. Schumacher said that this fact suggests that Bitcoin won’t be the thing to go forward with.
Kharpal then asked Hutchins about his views on Bitcoin, and he noted that he is not interested in the use of Bitcoin as an investment or currency equivalent. He, however, noted that the potential of the underlying technology- the protocol used in blockchain systems, shouldn’t be judged by the value of the tokens. He said that the value of the token should be taken as a “derivative of the use value of the protocol they enable.”
Bitcoin As a Store of Value
Hutchins agreed with Schumacher that Bitcoin might not be the major used coin in the industry later, but it could act a store of value which is generated via other tokens following the Proof of Stake model. He noted that this could happen because Bitcoin is the “most secure and most decentralized” compared to the other tokens. He didn’t compare Bitcoin with gold as it enables transactions. However, he noted that the role of Bitcoin in the system could be bringing value back into the system.
Garlinghouse said that the value of a digital asset depends on the utility that it provides. He said that PoW has several limitations. Yeung said that crypto’s secondary market has fizzled out because people who are still in the market are going to stay in it for the long term, especially after the ICO market of no-utility tokens took off last year.