The founder of Hotmail has become the latest to join the group of naysayers against the cryptocurrency market, claiming that it is fraudulent.
‘The Underlying Business Model…Is Fraud’
Sabeer Bhatia, an Indian entrepreneur who founded Hotmail, was speaking to Arabian Business when he made those comments. In his opinion, the valuations in the cryptocurrency market were simply speculation rather than success. He says:
The underlying business model that I have looked at is fraud. Cryptocurrencies are nothing more than white papers, a hope in the way the world will be.
He cites the IOTA token as an example. This is based on the Internet of Things (IoT), but in his view, it hasn’t sold one device to anyone. Rather, he argues, the idea behind it is that, in the future, there will be one IoT device that can talk to another, which will be capable of conducting transactions via the blockchain. He adds:
That’s the idea. And although it’s never been implemented, the idea is worth $15bn? Really? The values are entirely speculative.
As with many before him, Bhatia is wary of investing in cryptocurrencies claiming that they are “too good to be true.” Jamie Dimon, the CEO of JPMorgan, recently said that crypto investors should “just beware” when putting their money into the market. In Bhatia’s view, the cryptocurrency market is trying to grow a network where people buy tokens and take part in the growth of it. He questions: “what is the network really doing?”
Aiding the Lives of Others
Bhatia may not be a fan of the cryptocurrency market, but there’s no denying it hasn’t created a positive impact in people’s lives. This is particularly the case for individuals who lack a traditional bank account but own a mobile phone.
A report in February suggested that African fintech will become a $3 billion market by 2020, thanks to the rise of cashless systems in the nation. Not only that, but a report from Quartz last July shows that Bitcoin is already playing a key role in the questionable financial systems of some developing markets. Whereas, a February article from Wired suggests the Bitcoin will thrive first in developing nations, such as Nigeria, where people no longer have to put physical money into bags, to then get on a bus before handing it over to a relative.
The same can be said for the remittance market. With the use of cryptocurrencies, a family member in one country can send money quickly, easily, and with low fees to a family member in another country. They can do so knowing that the money they send is the money that will be received.
So when Bhatia questions what the crypto network is really doing, the fact that it’s helping to create a better life for millions of others is just one possible answer.
Do you agree with the views of Sabeer Bhatia, or is he blowing a lot of hot air? Let us know in the comments below.
Images courtesy of Shutterstock.
