Tim Draper is a founding partner of Draper Associates and headmaster at Draper University.
“I remain impressed by the possibilities for bitcoin and blockchain. Bitcoin is a currency that is accepted everywhere without any government friction or interference, a stored value solution that doesn’t require a holder to keep a room full of metals and art, and a friction less currency that can move automatically based on a contract, without the usual drag that comes from regulations and accounting rules.”
But there are many other uses.
A bitcoin wallet can also be used as an escrow for a contract in transition, as a redistribution of an estate or as a transfer agent to distribute payments, dividends or shares of stock.
Blockchains can keep track of money, data, inventory, contracts, etc., and “smart” contracts can be designed such that they anticipate eventualities and automatically distribute funds appropriately.
Corporations can use the blockchain to automatically pay employees their wages and benefits, pay shareholders their dividends, and pay noteholders their interest and principal payments, all with precise accuracy and automated accounting.
The blockchain can manage three-way transfers with ease, and eventually will handle retail transactions without the need for credit or debit cards. Insurance companies can use it to manage their claims and automate collections. Real estate escrows and titles can all be done quickly and easily between buyer and seller. Drugs and food can be authenticated by blockchain to guarantee their origins.
And the U.S. Government can manage social security, welfare, Medicare, worker’s comp, disability and all their data verification of citizens and businesses with bitcoin and the blockchain, since blockchain is the perfect government employee.
It is honest, incorruptible, secure, and fair.
Change is coming
Many industries will have to go through fundamental changes to adapt to the advent of this new way of thinking. People will have to learn that the bank, being the trusted third party for centuries will soon be replaced by computers that now monitor their holdings through the blockchain. Banking will be simpler, safer and easier than relying on people to do the monotonous work in some brick-and-mortar facility.
It is interesting to note that countries, now recognizing that they are in competition with one another, are trying to make sure they win the bitcoin economy. The smartest of these are either allowing bitcoin to prosper or recognize that they need a light touch in regulating bitcoin to attract all the creativity, money and startups that are flooding into the field.
The U.S. was wise to leave the internet unregulated and free because all the internet entrepreneurs created startups domestically and the economy around the internet blossomed. Keeping its regulatory hands light should help innovators stay in the U.S.
There are many parallels between bitcoin now and the internet in 1994. In 1994, the internet was just for hobbyists and hackers. I remember when I first used the Internet, the only things I could do were to buy diamonds and try to break into NORAD. There were very few uses. It took many years for the internet to become mainstream, but when it did, it transformed industries.
The long-term vision for bitcoin is to give the world economic emancipation. The potential if bitcoin is only limited by the imaginations of the entrepreneurs who work to drive this new virtual economy. To monitor and keep it honest, I believe that the community of users will ultimately self-regulate, possibly eclipsing or obviating the need for the various governments to regulate the crypto world.
I’ve been through the ups and downs with bitcoin, and I am as certain as ever that the bitcoin revolution is coming.
It is here to bank the unbanked, to democratize economic opportunity and to reevaluate governance. I expect that it will change everything from the banks and the financial system to healthcare, to democracy, even the government.
Tim Draper image via CoinDesk archives