According to Anthony Pompliano, Bitcoin’s transactional settlement network is a “sleeping giant” and is one of the most interesting stories across technology and finance though. While a lot of people may criticize Bitcoin as a currency or a store of value, but none can deny its transaction settlement capabilities.
Bitcoin’s transactional network is a sleeping giant
According to the recent post put forward by Anthony Pompliano, Founder and Partner of Morgan Creek Digital Assets, he states Bitcoin as a transaction settlement network that is run by miners is a “sleeping giant” and in next 3 years would be much larger and bigger than both Visa and Mastercard
According to the Pompliano, Bitcoin has two components,
- the digital asset that can be held by investors and
- the transaction settlement network that is run by miners,
but all the press coverage and attention is towards only the digital asset part whereas the true potential of Bitcoin lies in the transaction settlement network which did over $410 billion in on-chain transaction volume in 2018 and is likely to continue with $3+ billion in daily transaction volume in 2019. He also adds that more people should be paying attention to the sleeping giant — the transaction network rather than just looking and following the exchange price of Bitcoin.
Pompliano, using the data cited by Dair research, says Bitcoin miners were paid a total of $5.8 billion in revenue in 2018 for running the Bitcoin transaction network and if this top-line revenue figure is compared with other transaction settlement companies, Bitcoin network is currently sitting in the middle of the pack when it comes to revenue multiples for some of the largest networks in the world.
According to the analysis he puts forward, Bitcoin’s revenue multiple is actually lower than both Visa and Mastercard, the two competitors to which Bitcoin is compared with. Pompliano, positively concludes his post by saying,
“Today, it is 1/4th the market cap of Mastercard and 1/6th of Visa, but it wouldn’t surprise me if Bitcoin surpasses both within the next 36 months. The legacy networks were built for a world that we no longer live in and the decentralized network is built for the future. I know which one I’m betting on :)”
While Pompliano’s analysis concludes that Bitcoin’s transaction network is still pretty reasonably valued, one has to keep in mind that bitcoin is fairly nascent and is decentralized hence an apple to apple comparison right might just be over-optimism. But one can definitely not deny that Bitcoin is growing and so is its transaction settlement network.
What are your views on Bitcoin as a currency rather than just an asset? Do let us know your views on the same.