Last updated on March 27th, 2014 at 02:41 pm
Chamath Palihapitiya, a venture capitalist and former executive at Facebook, has shared his views on the future of bitcoin. He is one of the digital currency’s top investors, owning the equivalent of $5 million USD in October, according to TechCrunch.
He spoke to Bloomberg BusinessWeek senior writer Brad Stone at CoinSummit San Francisco on March 26.
When Stone asked Palihapitiya to update the audience about his latest investments, he said that he stayed optimistic on bitcoin, asserting his belief that “everyone in the world should have 1% of their assets in bitcoin.”
He dismissed all other cryptocurrencies by stressing that his preceding statement applied to only bitcoin, not other altcoins. He also said that the Internal Revenue Service (IRS) regulations issued on March 25 was actually beneficial to the bitcoin ecosystem and the general public as a whole, because it provided much-needed guidance.
“For anyone who thinks this is a bad thing, it’s actually a really good thing. There has been tax policy that has been exploited by rich people for years that have allowed us to wash taxes on anything we own,” said Palihapitiya.
Palihapitiya said that Mt.Gox and other bitcoin companies’ plights are “awesome for bitcoin.”
“We’ve got to flush out all the has-beens and also-rans. There’s a bunch of amateur hour bullshit in the bitcoin ecosystem. They will get replaced by a more systematic approach to problem-solving, the right checks and balances, the right regulatory participation,” he said.
”The fact that the price stabilized after is even more important, because it shows the growing maturity of the bitcoin market,” Palihapitiya added.
Palihapitiya emphasized that it was essential for bitcoin users to be open-minded.
“All of the folks that want to have a libertarian bent or some other political agenda and strap it in on top of bitcoin – it’s really bad for us. You need to replace them with people who have a technological motive or a financial motive,” he said.
Palihapitiya clarified that this was a significant point to him.
When asked about his biggest doubts as an investor in the digital currency, he answered, “We need to divorce ourselves from all the political rhetoric. I don’t think this is meant to be a mechanism to evade taxes, a mechanism to push back on government structure. If we can drop the ego-driven part of wanting to thumb our nose at the establishment, then what we’re left with is actually a Trojan horse that replaces the establishment. And that’s good enough.”
Bitcoin’s use for illegal transactions, like on the now-defunct Silk Road marketplace, is not what he is worried about.
Palihapitiya said that in the future, bitcoin will not be affected by criminals or terroists. He elaborated on that saying bitcoin will likely get to a point where the addresses are linked to real identities. He explained that this could simplify bitcoin, making it more likely to enter mainstream usage.