I just spent the entire week meeting bitcoin companies, VCs and other payment companies discussing bitcoin and digital currency. The gist, in my opinion: Digital currency will be mainstream. It will take many years (20-30) and it will not be bitcoin (sorry bitcoin fans).
The benefits of digital currency are clear: More mobility – no need for special purpose devices, more convenience – in the palm of our hands, more cost effective – no branches and tellers, more instant and borderless. The decentralized manner also makes sense: no government and central bank to fight for power and leadership and no concerns about a company becoming the global central bank and controlling a major portion of money flow.
Having said that, bitcoin is still at its infancy: No protection and high risk vulnerability to bitcoin scams (I’m sure someone will invent a more secured wallet at a premium cost), no one to turn to but yourself when something goes wrong and a system disconnected from the current monetary system.
The introduction of bitcoin ATMs and Point of Sale (POS), the questions around risk and compliance and the response from major banks are all steps towards evolving to digital currency and, in my view, some evolution of bitcoin will prevail in future years.
A final word about the investment landscape of bitcoin: Many of the VCs are cautious about bitcoin. They are well aware of the risks and questions and the press, in my view, is creating a bigger hype than reality. The potential disruption is the main reason we all pay attention to bitcoin but not even a single acquisition was made to validate path to liquidity.
Shani's Business Review (SBR) 