Traditional money transfer services like Western Union charge 7 to 8 percent per $100 of money transferred from one country to another, a big price for migrant workers who want to send money home to their families. “That’s a huge cut, right?” argued Wood. But if cryptocurrency transfers can put pressure on traditional companies, those expensive transmission fees may not be around for much longer.
“Right now, you pay the conversion fee from fiat currencies into crypto and back again and those [rates] are 2 to 3 percent. That’s a lot better already,” she continued. “But we think that the data is going to be so valuable that money over IP is going to be free because the transactions will be the information that companies want to get after.”
Bitcoin hit a record high of $5,856.10 on Friday, according to data from industry website CoinDesk. Its market capitalization, which is the total value of all the bitcoin in circulation, reached $96.7 billion, according to Coinmarketcap.com. That surpassed the market capitalization of major stocks like Goldman Sachs and Morgan Stanley.
If it were a stock at its current size, bitcoin would be the 15th largest component of the Nasdaq and the 58th largest on the NYSE. Though bitcoin has been on fire all year, investors are attributing the most recent rally to reports that China could reverse its ban on cryptocurrency exchanges.
Given the importance of computing technology in the modern era, Wood also questioned whether the markets are lacking some key commodities.
“It’s interesting that you’ve got corn and oil and copper trading on the exchange but you don’t have computing power, and bandwidth, and storage,” said Wood. “Well we think that’s going to happen because of blockchain technology and all of the cryptos that are coming along.”
The investor said that ether, a unique piece of code that is used to pay for the computational resources needed to run an application or program, is more like a “cryptocommodity.” Ether serves largely as a “fuel” in the generation of cryptocurrency.
“These markets are huge. We believe that digital services are as integral, or maybe more integral to our lives, than commodities that are traded on exchanges right now.”
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