The Promise Of Bitcoin Is Important, Not The Price

Journalist:
October 8, 2014

Venture capitalist Fred Wilson is not a hoarder of Bitcoin. He doesn’t care about that aspect of Bitcoin, but rather he is interested in the promise of Bitcoin as programmable money.

Now, he started buying it again after staying mostly on the sidelines for most of the past two years. He thinks that the market price of Bitcoin in the short term is driven by emotion (greed vs. fear), liquidity, technical factors, and a bunch of other things. Right now, those factors are driving down the price of Bitcoin. Last year they drove it up.

He says:

“I continue to believe that the thing to watch is not the price chart, the volume chart, or any chart. The thing to look at is Github, Hackathons, Accelerators, and everywhere else that entrepreneurs and developers showcase their work. That’s where the future of Bitcoin and its promise will be determined. And right now, based on what I’m seeing, it’s future is very bright.”

Wilson refers to an article by William Mougayar on “Why Bitcoin’s Price is Irrelevant to Its Success.”

Mougayar thinks that the important issue at this moment is how to get users to USE Bitcoin:

  1. using Bitcoins as a currency to pay for something, instead of fiat currency;
  2. using Bitcoin-enabled services that are built on top of the Bitcoin and blockchain technologies, i.e. delivering on the “Internet of money programmability” promise.

He says:

“I think we are entering a definitive new chapter in the evolution of Bitcoin. This chapter is one where its price doesn’t matter, but rather its capabilities do. The Bitcoin narrative needs to change. From now on, we need to see less headlines about Bitcoin’s price, and more headlines about Bitcoin-based innovations and applications”

Lower Bitcoin prices just mean that more people have access to the innovations and applications developed and deployed on the Bitcoin blockchain, and that’s what is really important.

Recent articles on CCN also underline the possibility that falling Bitcoin prices signal that the we are entering the first phase of the real Bitcoin economy, and the Bitcoin price drop is good news.

I conclusion, Mougayar hopes this Bitcoin crash is a wake-up call. It may have hurt a few people, but it’s going to benefit a lot more of them in the long term.

Images from Shutterstock.

Last modified (UTC): October 8, 2014 13:46

Tags: fred wilson
Giulio Prisco @giulioprisco

Science writer, software developer, Bitcoin/crypto enthusiast.