Ethereum Founder Vitalik Buterin: We Are in an ICO Bubble
- Ethereum founder says about ICOs: "A lot of projects will fail and people will lose money."
Vitalik Buterin, the founder of Ethereum, has made some very interesting remarks regarding the current ICO (Initial Coin Offering) market. In essence, he believes that the current trend of massive token sales is unsustainable.
Learn how to buy Bitcoin and Ethereum safely with our simple guide!
Buterin made these remarks during a trip to Israel, which was sponsored by eToro, which he took in order to meet local cryptocurrency and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term technology entrepreneurs. He was interviewed by Israeli financial newspaper TheMarker, which asked him about the ICO market.
Buterin said (translated from Hebrew): "I think that there is complexity in technology and sometimes there are conflicts. Even before Bitcoin there were attempts to create social changes or decentralize the power of the internet but they didn’t take off and for some reason it was adopted by the public. Blockchain is a decentralizing project and everyone is very excited. I think that one of the reasons for this is that it is a social revolution wrapped in something speculative, that can make people rich. Sometimes a conflict is created between people that want to change the world and people that see this technology as an investment instrument.”
“It would be a mistake to underestimate the value of ICOs or to say that they are a bad thing. ICOs are interesting because they enable monetization for open source projects, something that doesn’t happen often. I created Ethereum itself with an ICO. What we are seeing lately is that people are taking this idea too far, and there are projects that issue a coin not because it makes sense to issue a coin but because they have a product they can sell and raise money. Without a coin there is no business model. This creates the imbalance of incentives in the community at the moment.”
“I indeed think that we are in a bubble because all the Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term are rising and people have a feeling that they will always continue to rise. A lot of projects are raising more money than what they would be able to in the normal VC market, and sometimes there is no match between the necessity and usefulness of the project and its ability to raise money. Additionally, this market is still young and people still don’t know how to differentiate between projects that will exist in the long term and those that won’t. This thing is growing at a rate that makes it hard to control. I, for example, don’t participate in most ICOs because I think they are done at too high valuations.”
“If most ICOs fail, that is a risk (to Ethereum itself). We need to avoid over-publicizing these projects. The way to evaluate them is mostly by the résumé of the people in charge because there is no real way to judge such new projects. That is why there are projects that declare they are linked to this or that organization or even me - even if I am not linked to them. In the long run, the market will need to find a way to judge which projects make sense and what their appropriate worth is. It is not clear how things will look in a year or two. In the end the market will need to cool down. A lot of projects will fail and people will lose money."
Vitalik Buterin, the founder of Ethereum, has made some very interesting remarks regarding the current ICO (Initial Coin Offering) market. In essence, he believes that the current trend of massive token sales is unsustainable.
Learn how to buy Bitcoin and Ethereum safely with our simple guide!
Buterin made these remarks during a trip to Israel, which was sponsored by eToro, which he took in order to meet local cryptocurrency and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term technology entrepreneurs. He was interviewed by Israeli financial newspaper TheMarker, which asked him about the ICO market.
Buterin said (translated from Hebrew): "I think that there is complexity in technology and sometimes there are conflicts. Even before Bitcoin there were attempts to create social changes or decentralize the power of the internet but they didn’t take off and for some reason it was adopted by the public. Blockchain is a decentralizing project and everyone is very excited. I think that one of the reasons for this is that it is a social revolution wrapped in something speculative, that can make people rich. Sometimes a conflict is created between people that want to change the world and people that see this technology as an investment instrument.”
“It would be a mistake to underestimate the value of ICOs or to say that they are a bad thing. ICOs are interesting because they enable monetization for open source projects, something that doesn’t happen often. I created Ethereum itself with an ICO. What we are seeing lately is that people are taking this idea too far, and there are projects that issue a coin not because it makes sense to issue a coin but because they have a product they can sell and raise money. Without a coin there is no business model. This creates the imbalance of incentives in the community at the moment.”
“I indeed think that we are in a bubble because all the Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term are rising and people have a feeling that they will always continue to rise. A lot of projects are raising more money than what they would be able to in the normal VC market, and sometimes there is no match between the necessity and usefulness of the project and its ability to raise money. Additionally, this market is still young and people still don’t know how to differentiate between projects that will exist in the long term and those that won’t. This thing is growing at a rate that makes it hard to control. I, for example, don’t participate in most ICOs because I think they are done at too high valuations.”
“If most ICOs fail, that is a risk (to Ethereum itself). We need to avoid over-publicizing these projects. The way to evaluate them is mostly by the résumé of the people in charge because there is no real way to judge such new projects. That is why there are projects that declare they are linked to this or that organization or even me - even if I am not linked to them. In the long run, the market will need to find a way to judge which projects make sense and what their appropriate worth is. It is not clear how things will look in a year or two. In the end the market will need to cool down. A lot of projects will fail and people will lose money."