Pantera Capital’s Joey Krug Believes Bitcoin Would Not Succeed as Money Due to Volatility
Pantera Capital’s co-CIO and core developer at Augur, Joey Krug, wrote a recent article about Bitcoin and why he believes that the most popular digital currency will not succeed as money. According to him, blockchain technology might not be able to catalyze a revolution in the payments industry. Although Bitcoin could become digital gold, it would not be able to succeed as money since it is very volatile.
However, he mentions that the Beam Network could eventually revolutionize payments and how money is transacted. Beam wants to follow the original vision for crypto payments. That means, the ability to send funds around the world without third parties and in a very cheap way.
He has also talked about several revolutions that are changing the world and several industries, including communication, information and more. However, the financial landscape has not been in a revolution that brought drastic changes. There are many things that must be improved and changed such as intermediation or democratization.
With blockchain technology, the financial industry will change money, value, and finance. He compared it with what internet did for information. Krug explained that blockchain could create the necessary infrastructure for the financial system.
On the matter, Krug wrote:
“This infrastructure will be borderless, cheap, quick, and, most importantly, will let people trade on things they’ve never been able to exchange before, and if markets for those don’t exist yet, it’ll let them create it.”
Another thing he discussed was the importance of liquidity in the markets. In order to attract users, liquidity is a very important thing that must be improved. Although there are many decentralized exchanges that aim at solving centralization issues, they are not able to succeed due to the low liquidity they have. Once the problem of liquidity is addressed and solve, adoption will grow in an easy way.
He has also mentioned other projects that will be allowing an open financial world to grow. He explained that MakerDAO’s DAI decentralized stablecoin will be acting as a unit of account since it is able to maintain a $1 peg without issues, even during bear markets. Dharma will also be facilitating lending and issuance and the 0x platform will also be allowing new exchanges to grow and have a reliable protocol where to build their services. There are other projects mentioned by Krug such as Expo and dYdX.