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Bitcoin was a hot topic at Web Summit, a tech conference that took place at the end of October in Dublin.
Brightcove founder Jeremy Allaire — whose new company, Circle, is developing Bitcoin merchant tools and just secured $9 million in funding — spoke with Spotify investor Shakil Khan about the future of virtual currencies in their talk, Exploding Money: Bitcoin, Digital Currency, and the Internet Monetary System.
The key takeaway is that the infrastructure supporting Bitcoin is maturing and sufficiently stable to grow new industries. Allaire called digital currencies such as Bitcoin “as significant a technology as the first web browser.” To be sure, both speakers are quite bullish on Bitcoin, to which their investments can attest. And they have reason to be, at least for the short term, as Bitcoin hit record highs against hard currencies in November. But trepidation abounded in the Q-and-A portion of the talk. One audience member expressed concern over the security of the currency, which looms large in the forms of hackers, money-supply manipulators, liquitidy problems and straight-up organized crime. Bitcoin may have come out OK after the FBI’s raid on Silk Road, but future restrictions or events could shake stability right out from under it.
Thus, another audience member was curious to know what would happen if Bitcoin went to zero. Sure, investors who thought they were holding assets if this were to happen would be left cold (perhaps literally; it’s not like anyone can burn Bitcoins for heating like Weimar Republic Deutsche Marks). But sweating the exchange value of Bitcoins is missing the bigger picture. According to Allaire: “Cryptocurrency is an innovation that has happened. It is valuable. … The fundamental invention that has happened here is absolutely here to stay and will be built on for decades.” Whether Bitcoin eventually becomes the VHS or the Betamax of digital currencies is less important that the infrastructure being built.
That said, both speakers are betting on Bitcoin. “My attitude is it’s not too late,” said Khan. “It’s still so early in the stage that if it ends up going to 10,000, it kind of ends up being irrelevant whether it was at 166 or 200.” Allaire drew comparisons to the years 1990 through 1993, when browsers first made the internet navigable to average people. Companies and industries were built on top of those protocols, and iterations over just the last 20 years have revolutionized communication and shifted global balances of power.
The real value, Allaire said, is in the technology, which Khan referred to as “money-over-IP.” Said Allaire: “How can we move into a world where I can send and use money as instantly and instantly as I can over email?”
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