Davos has been in the mainstream media headlines this week, but it also crossed into the cryptocurrency space when Jeff Schumacher, the founder of BCG Digital Ventures, said that Bitcoin could nosedive to zero.
However, there has been a reaction to this from a fairly unlikely source as Brad Garlinghouse, the CEO of Ripple, countered that argument, coming to the support of the major decentralised cryptocurrency.
Bitcoin and Ripple have often been at loggerheads, especially in terms of their users and fans, who find themselves at odds on the benefits of either coin. However, Garlinghouse, who was supposed to hold a Roundtable with the head of SWIFT, admitted he still holds Bitcoin.
Garlinghouse went on to say that blockchain technologies will improve the conditions under which social, banking and industrial relations operate.
Not going to zero
Garlinghouse pointed out that because of its characteristics Bitcoin is very likely to be considered a digital store of value instead of an actual currency in the future. Comparing Bitcoin with XRP, the CEO is sure that its technology improves Bitcoin in terms of scalability and costs. However, he admitted having money invested in Bitcoin and denied that BTC is going to zero.
“If you take Bitcoin as it exists today as a static thing, the scalability problems and proof of work as a model have some real significant limitations,” Garlinghouse said. “There’s lots of people trying to improve that. Maybe they’ll be successful. Maybe they won’t. I’m not prepared to say Bitcoin goes to zero. I still own Bitcoin partly because it may become just a store of value.”
“However, at Ripple, we build upon a technology called XRP because it’s extremely scalable as compared to Bitcoin. It’s extremely low-cost and extremely fast relative to how Bitcoin works.”
Rewire the modern financial infrastructure
Garlinghouse went on to explain that we are on the precipice in terms of revolutionising the modern financial infrastructure, and blockchain is the tool on which to build the next iteration of it.
“There is an opportunity to fundamentally rewire how modern financial infrastructure works in the pre-funding,” the CEO added. “You have about $10 trillion pre-funded to banks around the world in order to enable cross-border payments.”
“If you could take advantage of crypto liquidity to fund real-time payments, you could actually take that $10 trillion and use it for other purposes, which is great for society. It’s great for banking. It’s great for industry. So that’s what we’re trying to rewire. We’re lucky to now have about 200 banks that have signed up. We’ve got a long way to go.”
Cryptocurrencies have been a topic at Davos for two years running now, but it is fair to say that this year they are being viewed with more suspicion than the last time after falling in price substantially.
However, it is quite a superficial view as these institutionalised members of the global financial market are finding it hard to look past the price alone. As Garlinghouse is at pains to point out, blockchain offers a real chance for a flawed financial system to get a much needed revamp.