The power of bitcoin lies in its value as an investment, said cryptocurrency entrepreneur Balaji Srinivasan.
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“Bitcoin has a lock on the digital gold application, for which longevity is very important,” said Srinivasan, co-founder and CEO of Earn.com. The startup, which bills itself as the first token-based social network, allows users to earn cryptocurrency by completing small tasks online, such as answering emails.
Bitcoin, one of the most popular cryptocurrencies on the market today, was being used for both investing and payment a few years ago. But today, Srinivasan said, there are competitors in the cryptocurrency transaction market that would be better suited as payment systems.
“There are other kinds of coins that are coming out that are filling other roles in the ecosystem,” Srinivasan said on CNBC’s “Squawk Alley” on Thursday.
“Probably for the foreseeable future, bitcoin is just a pure digital gold,” said the CEO, who is also a board partner at Andreessen Horowitz, a private venture capital firm. “For transactions, something like bitcoin cash, or something like the new Lightning Network that’s built on top of bitcoin, could be interesting.”
On Wednesday, venture capitalist Jason Calacanis told CNBC there is a 33 percent chance that bitcoin’s value may drop to zero. This was after the volatile asset lost a quarter of its value in January, briefly dropping below $10,000. At its high, in mid-December, bitcoin was worth around $19,500.
But Srinivasan said bitcoin isn’t going away.
“Bitcoin’s market cap in the long term continues to rise,” he said. “But its market share, as a percentage of total coin market capitalization, continues to fall.”
Relative to other investments, such as gold, Srinivasan said, bitcoin is “potentially, the best store value out there.”