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Bitcoin's price has lost more than 9 percent of its value in the last 24 hours. But according to Jeremy Allaire, the cryptocurrency is a long-term winner.
The CEO of Circle said on Thursday during an AMD Reddit that the bitcoin would become more significant as a reserve of value than as a payment and settlement protocol. He predicted that there would be millions of different cryptographic resources in the future and each of them will have a specific purpose. For example, Fiat's currency assets and stablecoins will be used for payments and settlements, while commodity activities will act as fuel for the use of protocols, networks and applications.
"Our point of view," explained Allaire, "is that cryptographic assets will continue to increase in all their forms […] We [think] SOV resources like Bitcoin will become much larger and more widely adopted and those other cryptographic resources will be used in an incredibly wide range of daily transactions. "
Bitcoin is zero?
Critics argue that bitcoin would be nothing but a store of value unless it becomes stable. Janet Yellen, the former head of the Federal Reserve, said last year that money was not an efficient means of processing payments. Even the financial services company Allianz liquidated Bitcoin in its 2018 report, stating that the cryptocurrency had no intrinsic value in contrast to the value asset portfolio such as sovereign bonds, stocks or paper money.
However, believers oppose by stating that the US dollar also has no intrinsic value: that the only reason people trust the greenback is that they trust their government. This also helps to clarify the nostalgia for the Gold standard, when government documents had their bid measured by the amount of precious metal they held.
"It digs a little deeper, and it becomes clear that gold itself has no intrinsic value," wrote Zachary Karabell, head of Global Strategies Envestnet. "Its supply is limited (like bitcoin, a force of the digital currency), creating a relationship between supply and demand that can not be easily manipulated".
The "Big Four" audit firm KPMG also considered that the bitcoin could reach a reserve of value, providing the institutions with large-scale support. But less than then, cryptocurrency will likely remain speculative due to its broader exposure to volatile retail markets.
Crypt in everyday use
Allaire suggested that the attention from the bitcoin had to be moved to allow the cryptographic ecosystem to adopt users in real time. He said that stablecoins like Circle USD (Ticker: USDC) are more attractive, as long as they innovate to scale throughput and reduce transaction costs to zero. Setting his own agenda for 2019, Allaire confirmed that Circle would expand the USDC adoption among retailers.
"The initial version of the smart contract for the USDC and the scheme are based on ERC-20 token, which now means that there is a bit of an end-user burden to have portfolios where they pay gas commissions and the like, "said Allaire. "We believe we need Layer 2 approaches that can radically scale throughput and lower the cost to a level closer to zero for USDC payments, combined with a UX in consumption payment that is much better than what is seen today in portfolios cryptographic ".
Allaire also announced that it would seek support from payment processing companies and commercial buyers to integrate the USDC into their solutions.
"Yeah, BitPay provides this service," he said.
Featured image from the World Economic Forum / YouTube
