The well-known venture capital investor Tim Draper has once again come out in strong support of Bitcoin, speaking on a CNBC segment. Draper argued that Bitcoin can be regarded as one of the top placements for investors’ financial assets. This is not the first time the venture capitalist has shown his support for cryptocurrencies – however, his remarks hold some very real credence as he highlighted the security and reliability of the Bitcoin blockchain.
Draper’s assertion that Bitcoin represents one of the most sound means of allocating capital was broadcast on CNBC’s ”Closing Bell” this past Thursday. He mainly heaped praise over Bitcoin and the blockchain’s intrinsic properties when it comes to security, effectiveness, practicality, as well as it being a decentralized network. Draper also showcased how Bitcoin caters to ”unbanked” people who would otherwise have no chance of utilizing traditional bank services. Moreover, he went on to suggest that the ability to transfer funds across the world without the help of traditional banking systems can be seen as liberating.
Draper is certainly not the only one singing the praises of Bitcoin. The meteoric rise not only in the price of Bitcoin during the last year but also the increased adoption of cryptocurrencies as a whole speaks volumes as to the growing interest in the technology. However, there are some who beg to differ. Fiat currencies are still widely regarded as a safer placement of capital than Bitcoin. Nonetheless, Draper argues that this preference is without merit, as traditional banks are ”being attacked all the time”. Furthermore, whilst traditional banks are often affected by theft and financial fraud, the Bitcoin blockchain has never been successfully hacked. Draper, therefore, concluded that this makes Bitcoin a far safer ”store of value” than fiat currencies.
Naturally, one could raise the issue of cryptocurrency volatility as a counterargument to Draper’s claims. However, Draper noted that in economies such as Venezuela, Nigeria, or Argentina, investors ”know” that the national fiat currency usually falls with about 30% each year. Therefore, he argued, converting fiat currency to Bitcoin can actually be a sound financial decision even if one considers the volatility of certain cryptocurrencies.
Moreover, Draper made a point of how the blockchain holds a major advantage over fiat currencies since it is completely decoupled from political agendas and governmental influences. This creates a fairer marketplace for currencies than that of fiat currencies, which are intrinsically tied to central banks and governmental agendas that can potentially shift.
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