Fiat currencies will no longer be in use in five years’ time as they are to be replaced by crypto-currencies, according to American venture capital investor Tim Draper who has 30,000 Bitcoins in his digital wallet.
At the WebSummit conference in Lisbon, Portugal, he told Forbes the fiat system will eventually disappear as people look toward coins like Bitcoin or Ethereum. He says its because fiat currencies are bound by country borders.
“In five years, if you try to use fiat currency they will laugh at you. Bitcoin and other crypto-currencies will be so relevant … there will be no reason to have the fiat currencies,” he said.
An unabashed promoter of crypto-currencies, Draper said he fell in love with Bitcoin not long after it was introduced in 2009. He bought 30,000 coins in 2014 (at about $600 each); they are now valued at over $214 million.
“This is the greatest technology since the internet,’’ said the investor. “This is a sociological transformation, it’s a movement.’’
He also said that Bitcoin will divide the financial services industry, at least initially. “There will be a few who embrace it and jump out front and say, ‘This is important’ and then there are going to be those who jump back and say, ‘I’m going to cling to the past, and I’m going to hold onto everything I’ve got.’ And you know who wins then,” Draper said. “It’s always progress, it’s always technology.’’
Talking at the conference, he said investors should thoroughly study who’s running the ICOs and whether their business plans seem legitimate. “I take huge risks,’’ the businessman said, adding “I lose my money 60% of the time.’’
Draper has rejected the possibility of the crypto-currency market imploding like the dotcom boom in the late ‘90s, saying “people are always going to say there’s a problem, and that usually means there’s a lot more upside.”
The founder of the Silicon Valley VC firm Draper Fisher Jurvetson, Draper has led investments in Twitter, Skype and Tesla before turning his attention to crypto-currencies.