Radio Sputnik: If we talk about what happened at the end of last year, and we know that there was growth at the end of the year and a small drop in January, but the extent to which it happened in December where you went from less than 5,000 to almost 20,000 in just a month, was that normal?
Simon Dingle: It is unprecedented, it hasn’t happened before. When was the last time that we re-invented the global financial system, it has never been done. So I think to make any predictions on how this plays out is foolhardy, but I also think it’s short-sighted to declare this a bubble or, in fact, to say anything about it other than we are in the midst of one of the biggest experiments in human history.
We are decentralizing the financial system, we have never done this before, and this is the biggest evolution of the financial system in history. Nobody can say with any certainty how this ends.
Sputnik: What do you think we will see ten years from now? Will there be more cryptocurrencies or will we see less of them? If we compare it with.com, we had a lot of players and some are still here and some are not.
Simon Dingle: I tend to be in the camp that doesn’t think this is like the.com bubble, I get the similarities, there are some parallels but I think this is wholly unlike the.com bubble. But if we stay with the paradigm for now then we are at the stage of early Microsofts and Apples. If you look at the price performance of Bitcoin, for example, and you compare it to the price performance of Apple, what was Apple’s share price when the.com bubble burst, it was a small fraction of what it is today. So the survivors, the companies that produce real value over time have exponentially more return and that is something that is impossible to predict. So we will certainly see some consolidation.
There are thousands of cryptocurrencies today, perhaps there would only be a handful or a few dozen or hundreds in the future, I don’t know maybe there will be even more, I subscribe to the thinking that we always overestimate the change that will happen in two years and underestimate the change that will happen in ten. It is almost impossible to guess what the world will look like ten years from now. I also tend to be quite loyal to Bitcoin; I am not a maximalist, I also love Ethereum and some of the other projects happening like IOTA. I think Bitcoin cashes a worthy experiment, even if the big block way of addressing scaling is a stupid one, but I think Bitcoin will still be around I think it would have moved on from proof of work and found perhaps a more efficient way of running consensus. I think something like the Lightning Network will really take it to the main stream. I honestly believe that ten years from now you will be doing everything from buying your coffee to paying your taxes in cryptocurrency. But exactly what that will look like, I think is impossible to predict.
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The views and opinions expressed by Simon Dingle are those of the speaker and do not necessarily reflect those of Sputnik.