Community Driving the Value of Coins, Says Paxos CEO
When asked about the drivers behind the value of cryptocurrencies, blockchain startup Paxos CEO Charles Cascarilla noted community as one.
More specifically, he was asked how volatility would play a role in cryptocurrencies acting as a payment mechanism in the coming years. Paxos provides the infrastructure for PayPal that enables their customers to make payments in cryptocurrencies.
Value behind coins
The Paxos CEO said that he thought that volatility and speculation prevent bitcoin (BTC) from being a proper payment mechanism. He noted that cryptocurrency use is in a nascent stage, but as bitcoin increased in adoption, this would eventually stabilize.
Cascarilla thinks that people buy bitcoin not to spend it, but because it will eventually play a role similar to gold. Although he added that bitcoin may actually never become a dominant payment mechanism, saying this role could potentially be fulfilled by a dollar-backed stablecoin.
As a belief in it as digital gold drives the value of bitcoin, Cascarilla noted that people buy ethereum (ETH), for a “chance to own the smart contracting layer that will replatform the financial system.” He highlighted several other features that drive the enthusiasm behind ethereum, including non-fungible tokens (NFTs). Cascarilla also stated that these could “change the plumbing of the financial system, which obviously needs a whole upgrade.”
Finally, when asked about upstart dogecoin (DOGE), whose value has doubled in the last week alone, he said “it just shows you there’s a lot of community that goes into driving some of these tokens rights now.” Still being in a nascent stage, he added that we are “in this period where there’s like this Cambrian explosion of different coins doing different things, and then there’ll be a weeding out process.”
Cascarilla added that the weeding out of winners and losers, would be based on community, functionality, reliability.
Paxos Series D funding round
Last week, Paxos received $300 million during its Series D funding round, raising its valuation to $2.4 billion. Paxos said it plans to use the investment to increase its headcount, expand its regulatory compliance infrastructure, and scale its operations.
When asked what contributed to the accelerating demand for Paxos’ services, Chad acknowledges PayPal’s significant influence. “There was the world before PayPal and the world after PayPal,” he said. “Everyone was afraid before and everyone’s afraid after, just for different reasons.”
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