Davos Panelist Predicts Bitcoin Will “Go to Zero”

This week, some of the most wealthy and influential people in the world are meeting at The World Economic Forum (WEF), in Davos, Switzerland, to discuss politics and economics, while making predictions and warnings about the future. Blockchain technology was a frequent topic of discussion during the many panels and interviews that have taken place so far.

Bullish sentiment for cryptocurrency was hard to find however, among the elite guests of the forum, many of whom seem committed to the “blockchain not Bitcoin” attitude of traditional financial institutions.

During a CNBC panel at Davos, Jeff Schumacher, founder of BCG Digital Ventures predicted that Bitcoin will “go to zero.” Schumacher said:

"I do believe it will go to zero. I think it's a great technology but I don't believe it's a currency. It's not based on anything."

(In a previous Op-Ed, CryptoGlobe explored where cryptocurrencies derive their value.)

Another panelist in the discussion, Glenn Hutchins, chairman of North Island, pointed out that Bitcoin serves a purpose as a store of value. Hutchins said: "It might be that the role of bitcoin in the system could be to bring value back, to hold your value there while you have tokens that have other use cases that you aren't using at the moment."

However, Hutchins added that he is still more interested in blockchain than cryptocurrency. Hutchins explained:

"I am much less interested in investing around bitcoin as a currency unit or a currency equivalent, or even the blockchain as an accounting ledger. I am thinking much more about the protocols. In other words, what is the underlying protocol going to do as a consequence of which, which tokens are valuable or not... When you send an email out today, you don't think about the underlying technology you are using … So you can hear us talk about … what protocol, what token, what technology solutions, how many transactions per second, but eventually what's going to happen is you are going to put something of value in, something of value will come out the other side and you are not going to care what the underlying technology is"

It is important to note that cryptocurrency is a direct competitor to the industries where these people make their money, while blockchain technology is something that can be harnessed by these interests to maintain dominance in the sector.

Advantages of Securing IoT Devices with Blockchain, Explained By Andreas Antonopoulos

Andreas Antonopoulos, a widely-followed Bitcoin (BTC) specialist, has argued that using blockchain to solve internet of things (IoT)-related security issues may not have any significant benefits.

Antonopoulos, whose comments came during a recent Q&A session, published on May 17, 2019, said it’s possible that a traditional database management system could work just as well (as a blockchain) when it comes to securing IoT-based applications.

Logging Information From IoT Devices Using Blockchain-based Systems Could Be Beneficial

However, Antonopoulos acknowledged that distributed ledger technology (DLT)-based systems could be useful in cases where “information is logged from IoT devices in a way that it maintains that information so that it can be changed in the future … so this [would be] an immutability benefit.”

He added that many people use the term blockchain to refer to databases that are able to register digital signatures (PKIs). Antonopoulos clarified:

I think that it’s important to clarify that the purpose of a blockchain is more than recording digital signatures, [or digital timestamping]. We’ve had PKI for 25 years. There’s nothing new there and it’s not particularly interesting to take a PKI database and make it public - unless you do something with it like … building a decentralized consensus system so you can have immutability.

He continued:

And then again, what problem are you solving? What are the problems in IoT security [that you’re trying to address?] A lot of people are trying to mash these two terms (IoT and blockchain) together.

According to him, there are great security risks involved when implementing IoT-based systems.

Solar Energy Trading On Blockchains

Responding to a question about the potential benefits of using an ERC-20 compliant token, instead of just using ether (ETH), when conducting solar energy trading on the blockchain, Antonopoulos first clarified that ETH is generated by mining on the Ethereum network.

He further noted that “if you have an ERC-20 token that’s related to solar energy, then perhaps you can mine, or mint, or issue that token in response to people generating energy. So, they can earn that token directly when producing energy. But the only way you can really measure how much energy somebody is producing in order to issue a token is to buy and use that energy. And in that case, [you] could just pay in ether.”

Antonopoulos also argued that tokens are not required in all cases and that users should exercise caution when new projects are trying to offer a native token.

“Markets Are Just Human Behavior”

The data communications and distributed systems graduate from the University College London also pointed out that blockchains “operate as markets” and they operate by “using markets.” For example, there’s a market for cryptocurrency mining which is based on a blockchain network, Antonopoulos explained.

There are also markets, Antonopoulos noted, for proof-of-work (PoW)-related mining profitability and “there are currency markets within the cryptocurrency space.”

He added:

All of these markets exist because of blockchains. [Therefore,] markets are a critical application of blockchain technology. Blockchains will create better, more fair, more transparent, more open markets...wherever markets are needed. Interestingly enough, even in places where markets are needed but not wanted….[For instance,] drug markets...Why? Because drug markets are [just] markets...Markets require two things in order to happen: supply and demand....Markets are just human behavior.