Few have a better understanding of the deep implications of blockchain technology as Jon Matonis. As a founding Director of the Bitcoin Foundation (He resigned as the group's executive director in 2014), as well as a member of the editorial board for CoinDesk, he has a unique understanding of both the deeper aspects as well as the day to day flows of this industry. We sat down with him to discuss the implications of everything from private blockchains to bitcoin as an investments fo portfolio managers.
Why are you interested in bitcoin and blockchain technology?
I am interested in the Bitcoin and Bitcoin's Blockchain technology for one fundamental reason. It provides a technological platform for the issuance and maintenance of a completely decentralized digital bearer asset. As the legal permissible limits for paper cash transactions is reduced around the world and governments usher in the pro-surveillance cashless "utopia," Bitcoin most likely will provide society's last chance for keeping the monetary revolution peaceful.
Bitcoin does not create any new currency attributes then we enjoy today with paper cash. Bitcoin simply allows us, as individuals and companies, to preserve the existing features of user-defined privacy, minimal traceability, irreversibility, and selective disclosure of holdings.
What are your thoughts on bitcoin as an investment for private investors?
I believe that there are great opportunities here. Bitcoin the currency unit allows for investment in an entire industry sector by simply investing in a monetary unit. Therefore, bitcoin acts as a proxy for the sector or an informal ETF for bitcoin-related ecosystem companies. Private investors should view bitcoin in their portfolio as they view gold in their portfolio -- approximately 5-15% of total holdings, depending on risk preferences.
What are your thoughts on bitcoin as an investment for institutional investors?
Bitcoin is an excellent non-correlated asset for traditional portfolio managers, and, fortunately, there are several options and funds now available for the institutional investor.
Are you invested/would you consider investing in bitcoin?
I already do for the above reasons.
What is your opinion on the current price of bitcoin?
Surprisingly, the long-term bitcoin price chart looks a lot like the chart for silver, a precious metal that is still largely considered as money. I think that the last run-up in price over $1,000 per one bitcoin may have been an over-reaction and we have consolidated at a more reasonable levels. Overall, the volatility has decreased dramatically and exchanges have become more liquid. We have also seen the introduction of new derivatives exchanges, such as BitMEX and OrderBook.
What is your opinion on the price of bitcoin in a longer time-frame?
In the medium to long term, I expect bitcoin price to increase steadily to over $10,000 per BTC, and this price will reflect the inherent value of transacting on the Bitcoin Blockchain, the world's most powerful and secure supercomputer. The price will be loosely correlated to the amount of useful commerce that is transacted over the distributed network.
What are you negative about regarding this industry?
I am negative about the gross misunderstanding in the industry that a blockchain is a blockchain is a blockchain. The public "Blockchain" is far superior to private "blockchains" because they prevent the institutionalization of cartel-like entities that are capable of far-reaching censorship, corruption, and financial manipulation.
What are you positive about regarding this industry?
Bitcoin is massively resilient and anti-fragile. It is all about the hashrate, and we are witnessing a low-level protocol standards war for a global value transfer protocol (VTP) similar to the standards battles for TCP/IP, HTTP, and SMTP.
XBT Provider offers easy and secure exposure to bitcoin through bitcoin products on regulated exchanges. Our products, Bitcoin Tracker One and Bitcoin Tracker EUR, are listed on Nasdaq Nordic in Stockholm. This article is a commentary by an independent contributor. At the time of publication, the author has long positions in bitcoin.