Dan Morehead, chairman of digital currency exchange Bitstamp, is predicting that in the future, Bitcoin will be an asset of the serious investor as he backs the digital currency to revolutionize money.
Based on its disruptive nature, Morehead adds that Bitcoin is comparable to how voice-over IP took away the dominance of giant telecommunications companies on communication.
Expected and rational
Currently, Bitcoin occupies a space in terms of investment where it is speculative and experimental. There are the believers in the digital currency who make it part of their portfolio, and those who shun it completely.
However, Morehead sees the digital currency revolutionizing money, and if that happens: “The upside is so high, it’s a rational, expected thing to have in your portfolio,” he said.
In the same way that Morehead uses voice-over IP as an example of a changing technology, the chairman gives credit to the underlying Blockchain technology that has seen other cryptocurrencies spawn.
Based on the protocols
Morehead said he considered Blockchain-based tokens to be protocols, a system of rules similar to HTTP and others that enable the internet to exist as it does today.
Right now, those protocols may run the Internet, but most of the profits are going instead to the applications, such as Google’s Gmail, which is built on top of those protocols.
The Bitstamp chairman says that in the Blockchain world it is the protocols, such as Bitcoin, that take the Lion’s-share of profits while the applications – such as the exchanges – only get a fraction of it.
Morehead points out how Coinbase, for example, has a valuation of about $1.5 bln, compared with Bitcoin’s more than $70 bln market capitalization.
That has a “very interesting implication for investing,” Morehead added.
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