BITCOIN has come under threat from the US Federal Reserve system because of a lack of transaction transparency but portfolio manager Steve Chiavarone suggested blockchain could be key to the cryptocurrency’s survival.
Bitcoin price has been fluctuating because of fears of government crackdowns since the value of the cryptocurrency skyrocketed before Christmas.
Mr Chiavarone said the US Federal Reserve could “kill” bitcoin unless more is done to further develop blockchain.
He said: “The currency itself isn’t a great medium of exchange, it’s not a great store of value. It has a fixed amount so the Fed would have to kill it at some point because they wouldn’t be able to engage in monetary policy.
“They can’t increase or decrease the supply of it. But blockchain behind it, we think is more real than people are giving it credit.”
The blockchain is a system that allows the transmission of digital information but blocks attempts to copy the data.
Mr Chiavarone said developing blockchain and finding new ways to employ it could potentially make cryptocurrency trading more transparent.
Making bitcoin trading more transparent could ease Governments’ fears and possibly reduce value volatility in all other cryptocurrencies like Ripple and Ethereum.
Speaking to CNBC, Mr Chiavarone continued: “If the first version of the Internet was an Internet of information, blockchain is an Internet of value. It allows for the digital transfer of files in a way that’s verifiable. It digitises trust.
“That – forget about currencies – could be revolutionary for supply chains.”
He added: “Pets.com was the first real online commerce company – there was a lot of buying into that because people saw the value of online shopping – pets.com wasn’t the best version.
“We think bitcoin is the pets.com of the blockchain.”
Bitcoin price decreased to $10,961.52 at 6.57am on Wednesday, January 24, according to CoinDesk. It saw its highest value before Christmas when it reached the monumental price of just under $20,000.
Bitcoin’s popularity has caused demand to skyrocket throughout 2017, pushing other cryptocurrencies like Ripple and ethereum to also reap the benefits of the cryptocurrency craze.
Ripple also lost value, trading for $1.37 at 6.58 after peaking at $3.69 in early January. Ethereum was trading at $1,000.42 at 6.57am on January 23.