A Goldman Sachs analyst has revealed further insight into the global investment banking giant’s developing thesis on bitcoin and blockchain technology.
In a podcast released this summer and highlighted by a recent New York Times piece, global investment research analyst Heath Terry addressed both bitcoin and the blockchain, praising the distributed ledger as a technology that would have “massive implications” for asset and ownership transfer.
“We’re first pitch, first inning in terms of seeing how companies are going to use the technology,” Terry said, adding:
“It’s fascinating in really early stages, but it’s hard to see a world where blockchain technology doesn’t change the way we think about asset ownership.”
Part of the firm’s “Exchanges at Goldman Sachs” series, the talk, recorded in June and published in late July, was meant to promote “The Future of Finance”, an annual report on disruptive financial technologies and concepts produced by its research team.
The three-part paper is the latest from Goldman Sachs to highlight bitcoin and the blockchain’s potential applications for asset transfer. Previous entries have spotlighted the technology’s applications for remittances and among merchants.
Elsewhere, the podcast discussed trends in finance including peer-to-peer lending, crowdfunding and mobile payments, while focusing on the financial habits of millennials.
Notably, Terry and fellow analyst Ryan Nash chose to describe this demographic as credit card and debt averse, stating that they believes these consumers better understand the cost of financial products, including the transaction fees associated with their use.
The podcast found Terry addressing various questions about bitcoin as an implementation of blockchain technology as well, though his conclusions as to the viability of this application were markedly more negative.
Terry indicated that he believes the adoption of bitcoin as a currency has been held back by its fluctuating price against fiat currencies.
“The volatility around bitcoin scares a lot of people, it was great in those periods when bitcoin only seemed to go up,” he said. “It’s gone up, it’s gone down and it’s gone up. For a lot of people, the point of having a secure currency the way bitcoin is supposed to be is having a secure store of value, having a way to transfer value.”
Terry further suggested that he has concluded bitcoin is not currently competitive against traditional payment methods, noting it has been primarily used in instances when alternatives are not available.
Still, he implied he was bullish that bitcoin or blockchain-based systems could succeed on their value proposition as a kind of digital cash, concluding:
“Over time though bitcoin is going to mature, a lot of that volatility will likely come out of the system. You’ll probably see more use cases as it does.”