Blockchain Capital’s Jimmy Song Talks Utility Tokens, Bitcoin (BTC) And Ethereum (ETH)

According to one of the best-known Bitcoin (BTC) community members, Jimmy Song, utility tokens don’t possess a compelling use case. With regards to equity tokens on the other hand, Song is of the view that they have a reason to exist since they offer liquidity to the owners.

Song got into the virtual currency space seven years ago when Bitcoin was trading at around $1. With a background in technology the idea of a decentralized currency captured his imagination and from then on he has never looked back. At the time he also invested in Bitcoin though it was particularly hard since there weren’t many exchanges then as the only place where the digital coin could be purchased was on Mt. Gox.

Bitcoin euphoria

The initiation of Song into Bitcoin development came in 2013 and it happened at a time when the price of the virtual currency was rising. While hunting for a wallet he came across Armory and he ended up serving as the company’s vice president of engineering.

Besides Bitcoin Song also invested in Litecoin (LTC) five years ago as well as Namecoin (NMC). However Song sees himself as a Bitcoin maximalist and as such doesn’t see other digital coins as having much value. Part of what is appealing about Bitcoin in song’s eyes is its pro rata distribution feature.

Technical due diligence

Song recently joined Blockchain Capital where his role is conducting technical due diligence. Some of the firms in the space which Song thinks are developing compelling technology include bit-go, Chaincode Labs and Blockstream. According to Song there are also other firms in the bitcoin space though they lack technical proficiency and this tends to cause problems when they begin to scale.

With regards to private blockchains Song’s view is that there doesn’t exist use cases which warrant the validation of data at such speeds. However when private blockchains are defined as a database where fine-grained permissions are granted to the owner for just a specific row of data then there is a use case for it in certain niches.

Security flaws

Song’s view of Ethereum (ETH) is that the sub system possesses security vulnerabilities and this has been proved true by experience. As such Song confesses that he would not embark on the development of an application that is based on Ethereum. However the market seems unconcerned. That said the virtual currency has found its niche in Initial Coin Offerings.

In the future Song is of the view that role of bitcoin as a store of value will continue to grow. As its value appreciates there will be a reluctance by owners to spend it since they don’t want to lose out on its anticipated higher future value. However according to Song bitcoin is unlikely to ever become a means of payment and that mantle will be taken up by other digital coins.

Per Song part of the reason bitcoin will continue to serve as a store of value is longevity and since it has proved for close to a decade now to be serving that purpose well, that is likely to continue to be the case.

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