Although Google hasn’t yet made any moves related to digital currencies, the search giant’s Director of Ideas Jared Cohen believes they are here to stay.
Speaking at SXSW – the annual interactive conference and festival held in Austin, Texas – Cohen said it is still unclear how digital currencies will develop, as they are a “pretty new space”, reports TechCrunch.
Jared said the future of digital currencies like bitcoin is clear:
“It’s very obvious to all of us that cryptocurrencies are inevitable.”
No plans… yet
While Google’s entry into the space would be a watershed moment for digital currencies, Jared’s statements should not be interpreted as Google’s endorsement of digital currencies.
Google Ideas is not exactly a skunkworks kind of organisation tasked with developing new projects. It is an interdisciplinary think tank based in New York City and has nothing to do with product development.
Cohen was tapped to head Google Ideas by Google Executive Chairman Eric Schmidt in 2010 and his statements do carry some weight, though.
Furthermore, although Google Ideas is not tied to Google’s core business, it is still a part of Google’s Business Operations and Strategy group and is not merely a philanthropic endeavour.
However, Cohen has a few ideas concerning cryptocurrencies that won’t go down well with all members of the bitcoin community.
Value in regulation
Cohen sees a lot of value in bitcoin, but he also warns that lack of regulation is a challenge, saying:
“There’s a danger to it not being regulated in some form.”
Cohen added that there is an ongoing debate about bitcoin regulation that will undoubtedly continue as bitcoin “plays out”.
However, it should be noted that the bitcoin regulation debate has been going on for years, but it has yielded very little in the way of realistic proposals, let alone actual regulation.
Cohen also cautioned that bitcoin may be just one model of a practical digital currency – likening it to Napster. We still don’t know how it will develop, he said.
Cohen appears to view bitcoin as a precursor to other digital currencies, but he doesn’t appear to be too certain about it. In the end, he merely repeats the question we are all too familiar with:
“Is bitcoin the model, or the master of cryptocurrencies?”
If bitcoin is merely a model that can be expanded and built upon, alternative digital currencies could be created along similar lines, backed by various organisations, from financial institutions to corporations.
The altcoin craze proves there is plenty of room for development and innovation, but for big players altcoins are not nearly as interesting as bitcoin.
On the other hand, if bitcoin continues to expand unchallenged, any new digital currency hoping to replace it would face an uphill struggle, as bitcoin’s infrastructure grows and matures with time.
The window of opportunity is slowly closing.