There has been a division of thoughts about cryptocurrencies from several prominent personalities around the world. One of the most revolutionary innovators in technology, Hotmail’s founder, Sabeer Bhatia in an exclusive interview with Arabian Business has criticized cryptocurrencies.
Hotmail was founded by Sabeer Bhatia in 1996 and was one of the world’s first webmail services. It was sold in 1997 to Microsoft for $400 million and was finally rebranded to Outlook.com in 2013 after several name changes.
Sabeer Bhatia joins other known business people going against cryptocurrencies such as Warren Buffet. Bhatia claimed that the business model of cryptocurrencies is built upon fraud.
“The underlying business model that I have looked at is fraud. Cryptocurrencies are nothing more than white papers, a hope in the way the world will be,” Bhatia criticized.
Bhatia continued explaining the speculative nature of the business, “There is a token called IOTA, which is based on the Internet-of-Things. But they haven’t sold a single device to anyone. The whole idea is: ‘In the future, one IoT device will be able to talk to another IoT device and settle any financial transaction between them using blockchain. That’s the idea. And although it’s never been implemented, the idea is worth $15bn? Really? The values are entirely speculative.”
Sabeer Bhatia was part of the dot.com bubble, and when asked about the comparison between cryptocurrency and the dot.com bubble Bhatia downplayed the comparisons.
“The likes of Pets.com and the Books.com were at least versions of e-commerce platforms that are only growing today. There [were] missteps back then but, guess what, we’re doing everything online today. They were right… but they were too early and didn’t have the staying power like an Amazon. Those failures tried to pick a vertical and wanted to be the solution for that segment. [There’s] nothing wrong with that.
No stranger to the digital world, Bhatia pointed out that networks have been an enormous influence and growing business in the last 10-15 years. Bhatia even linked cryptocurrencies in trying to build a network.
“The most successful companies of the last 10-15 years have been networks. Facebook, WhatsApp, Instagram, and even Uber is kind of a network. It seems that cryptocurrencies are trying to grow a network and people buy tokens and people participate in the growth of the network. But what is the network really doing? The fundamental question of creating value for society is one they carefully dodge.”
In conclusion, Bhatia thinks cryptocurrencies are too good to be true.
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