Ethereum’s Vitalik Buterin doesn’t have a lot of faith in most ERC20s these days. In fact, he expects most of them to crash and burn sooner rather than later.
25 Oct, 2017HACKED.COM
Ethereum’s Vitalik Buterin doesn’t have a lot of faith in most ERC20s these days. In fact, he expects most of them to crash and burn sooner rather than later. But the future of cryptocurrency is expected to be much brighter as investors and developers learn from ‘Tokens 1.0’.
Speaking at ETHWaterloo, Ethereum’s 23-year-old founder reminded us that 90% of startups fail. The same ratio likely applies to ERC20s. In Buterin’s view, 90% of the tokens currently listed on CoinMarketCap are going to zero. (Props to Jordan Daniell for providing the quote.)
The sobering remarks come as billions pour into initial coin offerings (ICOs), a novel but controversial crowdfunding model that allows startups to raise capital by minting their own cryptocurrency. It is estimated that no less than $2.3 billion flowed into the ICO market in the first nine months of the year, dwarfing traditional funding methods like early stage VC.
Regulators have taken notice, but are struggling to define this enigmatic space. For China and South Korea, ICOs are too problematic to even regulate. That’s why they rushed to ban them recently.
Although Japan has become the epicenter of cryptocurrency trading due to favorable regulations, the same latitude probably doesn’t apply to ICOs. According to a well-known Japanese blockchain entrepreneur, it’s only a matter of time before Japanese authorities clamp down on token sales.
Naturally, you wouldn’t expect Buterin to be pessimistic about the future of ICOs. Whereas Tokens 1.0 has a grim ending, the next wave of cryptos is going to be much better. He calls this “Tokens 2.0.” This era, which is a lot closer than you think, will see developers build cryptocurrencies that are of significantly higher quality.
In the meantime, the industry still has a lot of work to do to clean up its image. As Buterin says, “there are some good ideas, there are a lot of very bad ideas, and there’s a lot of very, very bad ideas, and quite a few scams as well.”
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