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When it comes to Bitcoin it’s all about the long game, says Abra founder and CEO Bill Barhydt. Bitcoin is flexible because you can break it up into smaller divisions, called Satoshis. In 10 to 15 years, those Satoshis alone could be $1000 a piece. It might take a while for Bitcoin to really start trading at the level of gold and silver, says Bill. Interestingly enough, says Bill, by and large, people who have Bitcoin are holding on to it, just like those precious metals. Once more of it is mined, we’ll start to see the market become less volatile.
Bill Barhydt is founder and CEO of Abra, a global crypto-wallet and exchange network. Abra’s breakthrough is its synthetic currency technology based on crypto smart contracts.
Bill’s passion is information technology and how it can be used to improve lives. He is an advisor and investor in many companies in the payments, telecom and consumer Internet sectors and in 2011 gave the first-ever TED talk on Bitcoin. He has also consulted to federal and international regulators on the impact of digital currencies and decentralized transaction systems.
For the past 15 years, Bill has worked as an executive and investor in the mobile industry including industry changing banking, gaming and IoT investments across the telecom and IT sectors.
Bill was an early employee of Netscape, where he worked on the first design and deployments for SSL and the X.509 digital certificate standard as well as designing early .com era services. He worked for Goldman Sachs designing trading systems and was a researcher for NASA and the CIA. In 2000, Barhydt received the Technology Pioneer Award from the World Economic Forum for his work in online collaboration and Internet Technologies.
Bill is an avid mountain trail runner and crossfit games competitor who has completed several tough mudder races.
Bill Barhydt: I think there’s a few things that need to happen for cryptocurrencies to become kind of a global replacement for either reserve currencies, global money transfer vis-à-vis like swift wires via your bank.
First of all the system needs to be massively liquid. If you think about dollar as a reserve currency, there’s trillions of dollars in circulation. It’s globally liquid across tens of thousands of banks, across 185 countries, etcetera, etcetera. That’s not totally true of cryptocurrencies yet.
If you take Bitcoin, which is the most successful cryptocurrency, its market cap is around $200 billion as of today. It’s tradable in 100 plus countries, but the liquidity of bitcoin versus even the U.S. dollar is relatively low, which means it needs to be worth a lot more if it would become let’s say a “digital gold”.
Gold is worth trillions of dollars in the aggregate. Bitcoin is not yet worth that much. And that’s important because if it’s not worth trillions of dollars and billions of people want to use it there’s not enough to go around. So you need to be able to break it up into tiny pieces so everyone can use it, just like gold.
And that’s not true until it’s worth a lot more money than it is today. But it becomes a circular discussion because the usage will also drive the price higher, just like speculation sometimes can drive the price higher.
So over time it should get there by its ability to be fungible with fiat via these exchanges as kind of an onramp into digital currency, but also it should meet the liquidity requirements that we need, meaning the price should be high enough, the ability to get in and out via traditional money should be reasonable globally over the next few years, and then I believe you can really have a viable discussion about using a cryptocurrency like bitcoin as a viable reserve currency.
So cryptocurrencies eventually will look like traditional commodities in my opinion, whether it’s gold or platinum or other metals is probably the best. But it could look like oil and gas and things like that.
And so they are starting to trade in a fashion that’s more and more similar to traditional commodities. But the difference right now is they’re not as liquid yet. So that means that the price is very inefficient, or the markets for cryptocurrencies are very inefficient.
So most people who are holding cryptocurrencies are long term holders, they’re not selling. So that actually means that the price of Bitcoin and Ether, for exam…
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