The CEO of Ripple, Brad Garlinghouse, believes that 99% of cryptocurrencies currently in existence will eventually disappear. Although likely a shock-based prediction, it does add a more sober flavor to the exuberance we often see in the crypto space. Amid stratospheric Bitcoin price predictions and new companies coming out in favor of blockchain, this gives some needed balance.
This prediction seems to be based on common business sense about how many companies will actually be able to meet the demands of their customers. As he said:
“Anytime there is a new market, there are a lot of people that run into that market and try to show that they can solve a problem, they can deliver a customer need.”
And the question arises whether all these companies are capable of doing this, which they likely aren’t. Even Uber has struggled to deliver a profit, and it has proved to be massively valuable to people all over the world.
Silicon Valley Ethos
The term “unicorn” is used to describe the tiny fraction of businesses that manage to change the world, and that is the subsection that Garlinghouse was speaking about in the previous interview. These would generally be the Facebooks and Airbnbs of the world. On the other hand, as oligopolies emerge, many companies need to die in order to make space for them.
Garlinghouse’s prediction is aligned with much of what venture capitalists say about their investing: you make a bunch of bets with the knowledge that many of them will go to zero. In other words, the fact that the cryptocurrency space is flooded with projects that might not survive doesn’t invalidate the entire sector.
India Showing Anti-Crypto Stance
Another prediction coming from the crypto sphere is from venture capitalist Tim Draper. He believes that any attempt by India to ban cryptocurrency will actually result in more, not less, corruption. 2018 saw banks be banned from providing services to those in the sector, and now it seems like a court battle is about to begin in order to see whether there is a full crackdown on ownership.
First of all, no one really knows how a country-wide ban would even work. Would they track down everyone who had bought Bitcoin? With the top cryptocurrency being an extremely in-demand investment when the value of India’s currency plummeted in 2016, it seems like a difficult task to execute.
Mr. Draper’s comments implied that less cryptocurrency meant more corruption. Likely what he meant is that cash allows just as much, if not more, illicit activity. Additionally, aggressive attempts to control the currency of the entire country generally lead to a more authoritarian take on the entire monetary system.
With Her Majesty’s Revenue and Customs, the department in charge of taxation and payments in the United Kingdom, recently unveiling their new guidance for cryptocurrency taxation, we are seeing many countries take a firmer stance on crypto. Many of these guidelines are shown to be in line with what other countries have announced. If India proceeds with a full cryptocurrency ban, that will put them and a few others far behind other countries in their ability to attract innovators.