Venture capital investor Tim Draper predicts that cryptocurrencies will overtake fiat currency in five years, Forbes reported.
"In five years, if you try to use fiat currency they will laugh at you," Draper told Forbes’ John Koetsier at WebSummit. "Bitcoin (TIKER: BTC.EXANTE) and other cryptocurriences will be so relevant ... there will be no reason to have the fiat currencies."
Draper says fiat currencies are bounded by country borders. The U.S. dollar travels pretty well, as does the Euro, but there are challenges here too. “That will all disappear soon, as we look to cryptocurrencies as stores of value and transfer agents,” Draper says.
Draper believes we'll survive just fine in an era of hundreds, if not thousands of currencies: "They’re all going to interrelate … and there will be exchange rates for all of them," he said. "My guess is that it will centralize around a wallet that you have, and when you pay for that Starbucks, your wallet will optimize to whichever currency has most value."
It doesn't necessarily sound simple, but Draper thinks that technology and smart marketing will abstract away the complexity.
"If it doesn’t get simplified it won’t get adopted ... good marketing people will simplify all use of these things," Draper said. "And we might have a Johncoin and a Timcoin …we might be trading those in realtime, putting a value on our time and attention.”
In 2014 Tim Draper bought 30,000 Bitcoin for under $20 million. Today, it's worth almost $215 million.