Adam Draper, founder and managing director of virtual reality and Blockchain-focused venture capital firm, Boost VC, recently stated in an interview that he believes Bitcoin and the Blockchain technology will operate as backend technologies behind reserve currencies like the U.S. dollar.
Over the past two years, an increasing number of banks and financial institutions have allocated significant amount of capital and resources into the development and research of the Blockchain technology and Bitcoin. A study released by prominent analyst firm Greenwich Associates, notes that $1 bln is spent annually on the development of Blockchain.
In spite of the hype around Bitcoin and Blockchain’s rapidly increasing user base, market cap and demand, Draper believes that Bitcoin and its underlying technology will merely operate as a backend to reserve currencies, as it fails to replace the U.S. dollar as the global currency.
“I don’t think Bitcoin or Blockchain are going to be consumer facing. It’s going to be the backend for everything. I think that we will continue to use the U.S. dollar. But the way that the world is moving is all digital, and there needs to be a huge ledger that keeps tally of all those transactions that are happening globally — and that’s what the Blockchain is going to be doing.”
Bitcoin or Blockchain?
It is this belief of Draper that led Boost VC to shift its gear from Bitcoin towards Blockchain. Its portfolio, which used to read virtual reality and Bitcoin, now reads virtual reality and Blockchain, reflecting Draper’s concerns around Bitcoin’s inability to secure mainstream adoption.
In fact, in the interview, Draper emphasized that the buzz around Bitcoin has declined, as consumers failed to adopt the cryptocurrency. However, he still believes the Blockchain technology and Bitcoin have great potential in the global financial market, as banks and financial institutions are partnering with startups to exploit the technology and experiment with Bitcoin.
“What’s really happening is that every bank in the country is experimenting with the Blockchain and experimenting with Bitcoin to figure out where the value is. For the first time ever, they’re working hand in hand with startups. Banks are asking startups for help to build products. And I’ve never heard of a time where that has ever happened,” explained Draper.