Bitcoin in 10 Years: 4 Predictions From SecondMarket's Barry Silbert
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The SecondMarket Holdings founder and CEO personally invests in 28 Bitcoin-based businesses through his Bitcoin Opportunity Corp. He also runs the Bitcoin Investment Trust. And, if the list of potential auction bidders U.S. Marshals recently fail-leaked is the real deal, the former investment banker has eyes for some of the 30,000 bitcoins -- nearly $18 million worth -- confiscated in the Silk Road takedown.
It’s not enough to say that he’s going all in on Bitcoin.
Silbert told Entrepreneur.com that he guarantees we’ll see another Bitcoin price bubble like we saw in 2013. At the start of the year, in January, the price of a single Bitcoin was around $13. Then, in late November 2013, it skyrocketed above $1,000. “The history of Bitcoin trading is a bubble, a correction, consolidation and another increase,” he said. “It’s happened four times and it will happen again.”
But where does he see Bitcoin a decade from now? For starters, everywhere you can buy anything online and all over the world’s biggest social media network.
Here are a few of his predictions:
1. Bitcoin will enable Facebook to provide remittance, banking and person-to-person money transfer services to its users.
Rumors that Facebook wants in on the e-payments game at home and overseas are making the rounds, but the billion-member social media mammoth has yet to confirm a single one of them.
Silbert told us that because of Bitcoin and other cyber currencies, Facebook will become a go-to platform for moving money from person-to-person, domestically and across borders. He also thinks it will also provide a host of basic banking services utilizing the Bitcoin currency and protocol.
“The information that you would put into a new bank account application, Facebook will already have all of that,” he said. “By creating a social graph, they’ve already created a network of trusted relationships, which provides the rails on which payments can move or remittance can move.”
2. Every e-commerce website will accept Bitcoin.
Being able to pay for goods and services online in the digital currency will be a given “every time you buy anything online.” In other words, whenever you square up at an online checkout, Silbert has no doubt that Bitcoin will be a payment option. You’ll see it alongside Visa, MasterCard, PayPal, etc. It’ll be a no-brainer.
Some 60,000 online retailers already accept Bitcoin today and more get on board every day.
3. Western Union and MoneyGram’s existing remittance businesses will be decimated.
Silbert said these two large, old-school wire money transfer services will either adapt to Bitcoin as a payment protocol, segue into an entirely different line of business or sputter out and die. Most likely, they’ll fold and fade away forever, he predicts.
“If they don’t adapt, they’ll be the Kodak of the next decade,” he said. “Incumbents like these tend to not innovate. They get disrupted and decimated.” Kodak, Silbert pointed out, didn’t adequately adapt to the adoption of digital photography and ended up going bankrupt in 2012.
Transferring money to people outside of the U.S. using Western Union and MoneyGram isn’t cheap. Steep fees are often heaped onto the amount transferred. Bitcoin, on the other hand, allows people to send money cross-border at a far lower cost, or “basically for no fee,” Blockchain.info CEO Nicolas Cary recently told Entrepreneur.com.
It’s no secret that Western Union isn’t in a hurry to get behind Bitcoin. CEO Hikmet Ersek recently said on Bloomberg TV that the 163-year-old company would only consider accepting Bitcoin if it’s “regulated and the customer wants it.”
MoneyGram has yet to take an official stance on the cryptocurrency, as far as we could gather.
4. Bitcoin will fuel new, innovative micropayment-based online business models.
Micropayments are exactly what they sound like: small payments, often as small as a few pennies each. Bitcoin will make them -- and the businesses that process them in exchange for goods and services -- more possible than ever before, Silbert predicts.
“Just like the Internet disrupted the publishing industry, we’re going to see Bitcoin micropayments creating some very interesting opportunities for pay-as-you-go, pay-based-on-time online businesses,” he said, “and, frankly, some risks as well to the traditional business model as to how things get sold online.”
We already make micropayments for one-off items and services that you can buy online piecemeal, like apps, music downloads, published content and cloud storage, as opposed to subscription-based online services paid for monthly and annually. These are the types of online merchants Silbert expects to flourish and multiply as more and more begin accepting Bitcoin micropayments.