Why XPRIZE Founder Peter H Diamandis is Swapping Gold for Bitcoin

Nermin Hajdarbegovic
Jun 23, 2014 at 12:38 UTC
Updated Jun 23, 2014 at 18:39 UTC

Peter H Diamandis, the founder and Chairman of the XPRIZE Foundation, has given bitcoin his blessing, describing it as a globally important and disruptive technology.

In a blog post, Diamandis wrote that bitcoin is finally moving from its “deceptive phase to a very disruptive phase”. He made a compelling argument, outlining positive developments in the bitcoin ecosystem and the evolution of his own opinion on the matter.

Diamandis 'space flight'

Pete H. Diamandis (centre)

Diamandis said he has been tracking bitcoin since its inception and his confidence has grown to such an extent that he is even trading in a portion of his gold holdings for bitcoin.

The XPRIZE Foundation has been around since 1995, with the stated goal of promoting emerging technologies through public competitions and initiatives.

The foundation’s board of trustees includes big names like PayPal co-founder Elon Musk, President of the Huffington Post Media Group Arianna Huffington, and Google co-founder Larry Page.

Changing the way we think of money

Diamandis explained the basic properties of bitcoin and made a bold claim: he believes bitcoin will do for money what email did for communications.

He said:

“At its core, bitcoin is a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things. Most importantly, it is an ‘exponential currency’ that will change the way we think about money. Much the same way email changed the way we thought of mail.”

Diamandis further pointed out that bitcoin is following ‘the six Ds’ – it is digitised, deceptive, disruptive, dematerialising, demonetising and democratising. Currently, he believes bitcoin is currently in the process of entering the disruptive phase.

Five phases of adoption

Diamandis borrowed from Second Market founder Barry Silbert when explaining the various phases of digital currency development.

Phase 1 was the deceptive, experimental phase, from 2009 to 2011. Phase 2, starting in 2011, marks the beginning of the early adopter phase. Phase 3, 2012 through mid-2014, is described as the beginning of the venture capital phase.

Diamandis says we are in the middle of Phase 3:

“We are right in the middle of Phase 3 right now. Thousands of bitcoin companies are getting funding. Many of these are trying to create the ‘User-Interface Moment’.

Next, between fall 2014 and 2015, Diamandis expects to see the start of Phase 4, described as the Wall Street Phase, which will be marked by “institutional money acknowledging digital currencies as an asset class”.

Phase 5 is mass global consumer adoption, which Diamandis and Silbert believe is just one to two years away.

Call for experimentation

Diamandis believes people need to get out there and start experimenting with bitcoin.

“Learn, do, teach… Go experiment! Create a bitcoin wallet and buy some bitcoin. There is no better way to learn than by doing,” he concluded.

Slightly confusingly, in his post, he mistakenly names merchant processor BitPay as a bitcoin exchange.

Diamandis concluded by mentioning his plans to discuss the digital currency in more detail via his Abundance 360 Community, which describes itself as “a group of entrepreneurs passionate about generating extraordinary wealth while creating a world of abundance”.

Images via Diamandis.com

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