O’Leary told CNBC Make It in December that there is a big problem among bitcoin investors: “I’m quite sure that 99 percent of the people that own bitcoin do not understand how it works.”
“That always is a cocktail for disaster,” he says.
The first thing O’Leary says you need to understand about bitcoin is that it is an asset, not a currency. By that he means that the quick and sudden gains or drops in value — known as volatility — make it difficult to use as an actual currency in transactions.
He explains it like this: When O’Leary recently tried to do a roughly $200,000 deal in bitcoin, the other party would only agree if he was willing to guarantee the value of the bitcoin against the price of the U.S. dollar, for fear it would fluctuate before the transaction was complete.
“If clearly neither side thinks it is stable enough to transfer in one minute, and they don’t even want to take one minute of risk, it is not a currency,” he says.
For Barbara Corcoran, bitcoin is interesting — but isn’t likely to be practical.
“I think bitcoin and other smaller cryptos are too complicated for mainstream use,” she tells CNBC Make It.
“I think that bitcoin — the other ones will disappear — is interesting to watch and could get up to a value of $60,000 if enough wealthy institutions or private individuals invest, but it will be as a novelty of sorts or for people needing to do under-the-radar transactions,” she continues. “As much as we don’t like U.S. currency, a.k.a. money, I don’t think it’s going anywhere.”
Robert Herjavec, the CEO of cybersecurity firm Herjavec Group, has an optimistic outlook for the digital currency.
“To me, it’s the wave of the future,” Herjavec tells Money. “Fast forward 25 years from now, there will be some form of a cryptocurrency that we will pay for electronically, and the concept of cash will go away one day.
“It’s going to have massive benefits for humanity, in all kinds of transactions,” he says. But for now, he’s not personally investing — on ethical grounds.
“Cryptocurrency is the choice of funding and transactions for hackers,” he tells Money. “And since we’re the good guys, I can’t get behind [that]. If there was no cryptocurrency, much of the large hacks that we’re seeing today wouldn’t exist.” […]