Former US Treasury Secretary said at Consensus 2016: Blockchain can succeed without Bitcoin

Former US Treasury Secretary Larry Summers participated in a fireside chat at Consensus 2016. He spoke in depth about emerging financial technologies, such as blockchain and Bitcoin, and the impact they are having.

Alan Murray from Fortune Magazine noticed that Summers closely linked Bitcoin and blockchain in the conversation during the meeting. He did not express the idea of ​​a competitive relationship. He believed that the technology could bring about tremendous changes to the world's economic process.

Summers foresees three possible outcomes of this transition: blockchain coexists with traditional fiat currencies; blockchain relies on Bitcoin; or blockchain interacts with digital currencies, but not Bitcoin.

While Summers is open to the possibility of digital assets becoming a global currency or store of value, he predicts the underlying technology could be more impactful.

Summers told attendees:

“Will blockchain technology become a fundamental technology? I think the answer is very likely yes. Will Bitcoin become a valuable store of value like gold? I don’t know, but I think the answer is “no” is not appropriate.”

Summers also predicts that this shift may play out differently in the broader financial system.

For example, he said he believes we will see companies like JPMorgan Chase accepting Bitcoin in the same way they accept dollars and euros.

However, he believes that this shift depends on the progress Bitcoin makes in the market.

He taunted:

“Bitcoin has the same characteristics as a fax machine, which is a doorstop, and a world where everyone has a fax machine is a very valuable thing.”

Rethinking Bitcoin

While Summers wouldn’t bet directly on innovators in the space, he said the underlying technology could be successfully replicated by incumbents.

“While there is an argument that you can’t get all the benefits of blockchain without Bitcoin, I think we will find ways to get the benefits of blockchain without the uncertainty of Bitcoin’s value,”

He also pointed out some examples of disruptive change, where new entrants may be more likely to succeed in developing new technologies, and imagined that even if digital currencies ultimately fail, blockchain technology will still bring disruptive changes to businesses.

“My predictions do not give confidence to the current large financial institutions, nor do they inspire others in the blockchain space. I think it is incorrect to say that blockchain is the be-all and end-all for the existing financial institutions and Bitcoin is the be-all for the new financial institutions.”