SingularityU Exponential Finance Summit Interview with Cathie Wood: Why Bitcoin is set to be the cryptocurrency winnerBy Ryan Noik 18 June 2019 | Categories: feature articles
One of the illuminating interviews to come out of the SingularityU Summit, recently held in Cape Town, was with Catherine (Cathie) Wood, the CEO of Ark Invest. On the back of Facebook’s impending launch of its own cryptocurrency, Libra this week, Wood’s opinion on blockchain, bitcoin and cryptocurrencies is particularly relevant.
More specifically, she anticipates that more than likely Bitcoin will prevail as the predominant cryptocurrency, amongst three or four that find permanent traction when it comes to payments. As for the rest? Well, an impending shakeout of crypto players will likely separate the wheat from the chaff.
We can also expect to see a few utility based blockchains prevail, such as Etherium, which she highlighted as probably the best one for smart contracts. As to why Bitcoin is the best bet, she explained that this is due to the opinion that Bitcoin is still the most secure, with its underlying technology never having been hacked, in the past ten years it has been in existence.
“The hacks you do hear about are the apps on top of the technology, that is where the software mistakes have been made. Because it is open source it has a lot of eyes watching it and a lot of livelihoods depending on it, so we think it is super secure,” Wood elaborated.
Crypto faces a bright future
Furthermore, she believes that the future of the cryptocurrency is bright, with it reaching a point where it becomes akin to the US dollar, only as a digital currency. She noted that unlike the dollar, which the United States Fed and Treasury, exert control over, the only control in Bitcoin is that mathematical metering up to 21 million units and then no more will be created. “This will ensure that it will be an incredible store of value,” Wood added.
Moreover, the strength and endurance of Bitcoin has something else going for it – it has been battle-tested and withstood both the Chinese and the US governments. Wood explained that while China essentially shuttered its crypto exchanges and tried to dampen cryptomining, both have simply migrated to Japan, South Korea and Vietnam.
“As well, regulators in the United States have adopted a do no harm approach to cryptocurrency, as they don’t want to be blamed for preventing the next internet in their country,” she added.
It's all about trust
But the really relevant story of Bitcoin is not just about the strength of cryptocurrency, or how it will fare in a digital world. Rather it is about trust and trustworthiness. Wood elaborated that people today don’t trust large institutions or banks, nor do they trust governments, both of which the Baby Boomers generation were most likely to consider trustworthy than the generations to follow.
Rather, people today are more likely to trust in emerging technologies, and trust that the mathematical metering is going to protect the purchasing power of Bitcoin in the long run.
It’s not an unreasonable development. Wood pointed out that if you consider the purchasing power of the US dollar, it has diminished 90% in the last fifty years. “Most people don’t think of that when they think of the dollar, but that is due to inflation, and that inflation was caused by the way monetary parties managed monetary policy and the treasury managed the dollar,” she noted.
Nor is the diminished trust in government a US-only issue. Locally, the cost of state capture under Jacob Zuma has been reported to be in the region of R1.5 trillion rand, a third of South Africa’s gross domestic product (GDP). What is common to both the US and South Africa is that it was people who failed their country. Perhaps technology can do better, may well go the thinking. And who could argue with that?
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