Bitcoin May Die But The Technology Could Survive — Rickards

By March 20, 2014Bitcoin Business
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(Kitco News) – The future of Bitcoin does not rest with the currency itself but with the network that is being created because of it, said a world-renowned investor and author.

James Rickards, author of the best-selling book Currency Wars, said that he doesn’t think that Bitcoin is a viable currency “for everyday citizens.”

According to the aggregated price chart on, as of 1:05 p.m. EDT, Bitcoin was trading at $591.22 per unit. The price is down modestly from the start of the week when it was hovering around $630 per unit.

However, Rickards said it is important to separate the currency from the technology that is being created.

To further explain the developing market, Rickards compared the virtual currency to human evolution. Although Neanderthals died away, human DNA survived, he said.

“I think what is going to happen is that you will find that the currency dies out but the technology may survive,” he said. “What it really is, it’s heavily encrypted, open-sourced, inexpensive computer code for transferring title to anything, not just currencies units but stocks, bonds, land titles.”

According to a recent research paper, the Bitcoin network has come a long way. The research and advisory firm Aite Group LLC recently said in its report that investments in Bitcoin startup companies have surpassed $117 million.

The report added that the majority of startups have been in North America, which has attracted about $98.6 million; in Asia, $13.3 million was invested in Bitcoin companies and in Europe about $5.6 million was invested in the digital currency technology.

Rickards added that most people are investing in Bitcoin because of the technology potential.

Looking at the cryptocurrency, Rickards said that one of the reasons why he doesn’t like Bitcoin and wouldn’t recommend buying it is because it hasn’t truly been tested.

Although the currency has suffered as a result of technical problems and unsecured networks, he said it hasn’t gone through a full business cycle.

“Bitcoin came out 2009 and since then we have been in an economic expansion – a weak expansion but (the economy) has been expanding – and we’ve never had a downturn,” he said. “So we don’t know how Bitcoin will do during a bear phase of the business cycle.”

Bitcoin’s role as a practical currency continues to be debated by government and central banks around the world; according to media reports, the Danish central bank has come out and warned that Bitcoin is not a currency but likened it to “glass beads.” The report, by the Danmarks Nationalbank, said that the cryptocurrency displays the characteristics of a commodity, which people have attached a value to.

Read the latest news in gold and precious metals markets at Kitco News.

By Neils Christensen of Kitco News;

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