According to millionaire investor Tim Draper fiat currencies will be obsolete in the next five years. His belief that cryptocurrencies will replace conventional fiat was something that he recognized some years ago. The founder of Draper Fisher Jurvetson, has previously invested in companies like Twitter, Skype and Tesla and for the past three years has focused on cryptocurrencies. Draper told Forbs:
"In five years, if you try to use fiat currency, they will laugh at you. Bitcoin and other cryptocurrencies will be so relevant ... there will be no reason to have the fiat currencies."
Back in 2014 Mr. Draper purchased 30,000 Bitcoins from a government auction that seized the coins for online darknet market Silk Road. At the time the coins were worth only $20 million dollars. At todays rates they are worth approximately $214 million representing a ten fold gain in less than three years.
Draper has always advocated for cryptocurrencies and believes that they are a more stable and reliable storage of value compared to other traditional fiat currencies. These cryptocurrencies do not lose value when you cross from one country to the next. This borderless retention of value is something that most everyone can appreciate.
Everyone at some point has exchanges their native fiat for another and the rates are almost never one to one. Sometimes you lose on the conversion and other times you gain. There really should be a universal currency that retains value regardless of geographic location, and cryptocurrencies are the answer.
The Nigerian, Naira drops 30% when you cross the border, the Argentina peso is worthless and both Zimbabwe and Venezuela are virtually without currencies. Bitcoin and cryptocurrencies will represent hope and stability for these countries that have no real way of stabilizing their fiat currency. There are also the millions of unbanked people that will be able to store, access and distribute wealth that has true value.
When asked about the 900 plus cryptocurrencies currently listed, Draper said:
“They’re all going to interrelate … and there will be exchange rates for all of them. My guess is that it will centralize around a wallet that you have, and when you pay for that Starbucks, your wallet will optimize to whichever currency has most value."