09/11/2017 05:43

Bitcoin Millionaire Tim Draper: Cryptocurrencies Will Replace Fiat in 5 Years


In five years time, fiat currencies are no longer going to have any use as cryptocurrencies replace them. That’s according to venture capital investor Tim Draper.

At the WebSummit conference in Lisbon, Portugal, Draper was speaking with Forbes. Expressing his views on where he sees the digital currency market, he said:

In five years, if you try to use fiat currency they will laugh at you. Bitcoin and other cryptocurriences will be so relevant … there will be no reason to have the fiat currencies.

Draper, founder of Draper Fisher Jurvetson (DFJ), an American venture capital investment firm, has led investments in Twitter, Skype and Tesla. Now, he’s turning his attention to cryptocurrencies.

This is evident by the fact that he purchased 30,000 bitcoins during a government auction of assets seized from online darknet Silk Road in 2014. At the time, those coins were worth $20 million. Today, they are valued at over $214 million.

Bitcoin has experienced unprecedented heights during 2017. In the last few weeks, alone, the currency has surged to above $7,000. It was within touching distance of the $8,000 barrier yesterday at the news that the SegWit2x upgrade protocol had been suspended.

Remaining confident in the future of cryptocurrencies, Draper believes that the fiat system will eventually disappear as people look toward coins like bitcoin or ethereum. According to him, they remain reliable stores of value compared to the fiat system. His reasoning behind this is the fact that fiat currencies are bound by country borders. As an example, he cites the Nigerian Naira, which drops 30 percent when a person crosses the border.

While this may be the case, there are a significant number of altcoins in the market. CoinMarketCap puts that figure at 986 which have a market value. New ones are continually being created, all of which are claiming to provide a new solution to how we conduct our day-to-day lives. Despite this, though, the large number of cryptocurrencies in the market isn’t worrying Draper. In fact, he thinks that they will eventually all work together at some stage.

They’re all going to interrelate … and there will be exchange rates for all of them. My guess is that it will centralize around a wallet that you have, and when you pay for that Starbucks, your wallet will optimize to whichever currency has most value.

It remains to be seen if and when that happens, but from someone who has led investments in prosperous companies such as Twitter, Skype and Tesla, Draper may be on to something.