After a recent torrent of ICOs (initial coin offerings), many in the cryptocurrency community are expressing fears of what they see as systematic risk to the ecosystem while regulators are starting to notice the field and its perils.
Now a senior figure in the space, Ethereum’s first CEO, is publicly sounding the alarm bells too.
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“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb,” Charles Hoskinson told Bloomberg in an interview. “There’s an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”
Despite this, Hoskinson thinks that cryptocurrency ICOs will continue to serve as a crowdfunding method for new ventures, albeit after a much-needed purge of the current players in the field. He said: “Regardless of regulation ICOs are here to stay. After it collapses they’re going to pick up the pieces and say how do we do things differently.”
Hoskinson founded Invictus Innovations and created BitShares, a cryptocurrency utilizing Delegated Proof of Stake, a consensus algorithm also used by Lisk. He is a founder of Ethereum and served as its initial CEO from December 2013 until June 2014.
Hoskinson’s contributions to the smart contract platform are said to include designing the legal structure, crowdsale model, and building a global network of supporters. Hoskinson is currently the CEO of the Hong Kong based Input Output HK.