Becky Liggero talks to Jonathan Levin of Coinometrics and he shares the current state of the Bitcoin economy and what the future of virtual currency will be.
Becky Liggero: Today, im with Jonathan Levin. He is a post graduate economist at Oxford; has degrees from everywhere. He is expert in virtual currency and today we were going to talk about state of Bitcoin and the future of virtual currency. Let’s begin with what actually is the current state of Bitcoin economy?
Jonathan Levin: Right now, Bitcoin is in the state of flat, as always. We’ve had a temporary attack on the network, where 51% of the network was actually controlled by a single entity. And the network is like slowly recovering from that. So now it is back down to a safer percentage and people are getting more confident in the ability for Bitcoin to survive these types of attacks in the future.
Becky Liggero: Here at the iGaming Supershow, you gave a presentation and you provide us with three scenarios that you believe the Bitcoin economy will play out. Can you tell me what those scenarios are?
Jonathan Levin: The first scenario is that, Bitcoin doesn’t change. They brought some growing pains as any technology does. Bitcoin was designed in 2009, didn’t have an ambition to be a currency that facilitated million transaction. So there’s going to be some growing pains. One thing that could happen is Bitcoin doesn’t change, doesn’t solve intensive problems and a bigger better currency comes along and sort of take that market position.
Another scenario would be is also it doesn’t actually solve all of those problems but it does get used for a specific cases. One thing that I am particularly passionate about is explaining the difference sort of inefficient payment system and the dissentialized payment system. Bitcoin is not that cheap to run but it does provide this unique ability to have no trust in one authority. And if you use cases and find Bitcoin and implement it, find that particularly attractive then it doesn’t matter about some these smaller economic concentives. And the other option is actually, Bitcoin does solve these economic concentives problems and we move into sort of mainstream adoption of Bitcoin as the currency.
Becky Liggero: What is your opinion on Bitcoin becoming the mainstream currency?
Jonathan Levin: I personally think that Bitcoin won’t become a mainstream currency. I think it’s the inflation in nature, the fix supplies’ gonna be a problem because making loans in Bitcoins is gonna be untenable. I think there’s some problems on centralization of mining. The meme that it won’t be able to be this trustless environment that we want it to be. So I’m not that bullish on very long term future Bitcoin. Bitcoin will be there two to three years. We will see the evolution and we will see some technological developments in that time.
Becky Liggero: What is your prediction on the future of virtual currency?
Jonathan Levin: So I think in 10 years plus view is that virtual currency, the centralized systems, will be a huge market. Many businesses will be built on top of these platforms where there is no single authority that you need to build your business on. And it will create this sort of innovation platform where thousands of developers around the world were working on the same projects.”
That’s a long way away. I think this is a very long game. Bitcoin will lead that space for the next 5 years and then we will see some innovation.
Becky Liggero: What characteristic of the currency will succeed in the future? How they differ with Bitcoin?
Jonathan Levin: One of the things that Bitcon has is that it is secured by these algorithm, which is showing proof of work. You need to proof to the Bitcoin that you’ve expended some computing power to secure the network. I think the next evolution of virtual currencies will have different proof of work to Bitcoin and make it better in terms of decentralization.
