V God was interviewed by CNN: Cryptocurrency is in a bubble, Musk will not always have the ability to influence the market, Ethereum may eventually catch up and surpass Bitcoin in market value

Source: CNN Business

By Matt Egan

Translation: Chen Zou

Ethereum co-founder, Vitalik Buterin, is known as V God in the cryptocurrency circle. The 27-year-old Ethereum co-founder recently accepted an interview with CNN Business, in which he believes that the crypto market is in a bubble. However, he stressed that "it is notoriously difficult to predict" when the bubble will burst. "The crypto craze may have ended, or it may end in a few months. ... Elon (Elon Musk) will not have this influence forever."

Ethereum fell below $1,900 early Wednesday morning, according to Coinbase data, a staggering drop of more than 40% from Tuesday night. Ethereum rebounded to around $2,700 Thursday morning, but it is still a considerable distance from its record high of $4,384 set on May 11.

Buterin was born in Russia and started programming at the age of 4. At the age of 6, he immigrated to Canada with his family and has dual citizenship of Russia and Canada. At the age of 7, he created the complex document "Rabbit Encyclopedia". At the age of 10, he could do three-digit mental arithmetic at twice the speed of his peers. At the age of 12, he could use C++ to write simple games. He dropped out of college at the age of 19 and became the co-founder of Ethereum at the age of 20.

Vitalik Buterin, who is only 27 years old, has long been accustomed to the bull-bear cycles of these cryptocurrencies. In his eyes, the crypto market is more than just a game of money.

Cryptocurrency is no longer just a toy

“We’ve had at least three of these big cryptocurrency bubbles so far, and a lot of times, the reason they stop is because something happens and then suddenly it becomes clear that the technology is not there yet,” Buterin said.

Buterin laid out his vision for Ethereum in a white paper in 2013, and Ethereum officially launched two years later. Today, it is the second-largest cryptocurrency, second only to Bitcoin. Unlike Bitcoin, which is seen as "digital gold," Ethereum is a blockchain-based platform for developers to build and operate applications. It's like Android or iOS in the cryptocurrency world.

In late 2017, Buterin unleashed a tweetstorm questioning whether the cryptocurrency space really deserved its market valuation, which at the time was just over $5 trillion. He noted how little had actually been achieved, and cryptocurrency prices fell shortly thereafter.

Unlike then, Buterin is encouraged by the "tremendous" progress that technology and applications have made in recent years. For example, Ethereum activity has risen sharply in recent months due to the rise of NFTs on social media and several iconic out-of-circle events, as NFTs are based on the Ethereum network.

“It feels like crypto is ready for mainstream adoption, which was the exact opposite four years ago when it was not ready at all,” Buterin said. “It’s not a toy anymore. It’s possible that Ethereum will eventually catch up and surpass Bitcoin in market value, although I’m not sure.”

Musk, the dog-loving boss with a big mouth

However, Ethereum, and cryptocurrencies broadly, still have problems. For one, they are still extremely volatile, especially for retail investors who are accustomed to more modest moves in the stock market.

And some billionaires seem to be playing with cryptocurrencies. Elon Musk's on-again, off-again love affair with various coins has sent shockwaves through the field.

After Musk tweeted on May 12 that Tesla would stop accepting Bitcoin payments due to concerns about the negative impact of cryptocurrencies on the environment (because Bitcoin's complex mining process requires a lot of computer power and electricity), the mood in the crypto market immediately shifted. According to CNBC, nearly $365 billion in cryptocurrency market value evaporated that day.

Buterin acknowledged that cryptocurrency markets tend to be “vulnerable” to disruptive events until they “build up their own immune systems over time.”

Musk’s tweets have influenced the market, which is the first time in the cryptocurrency space that things have happened recently. Buterin thinks it’s reasonable to say that it’s a bit crazy right now. But the market will eventually improve. Elon won’t have this influence forever.

The Tesla billionaire has also repeatedly promoted dogecoin, which was created to satirize the crypto market. Musk also mentioned Dogecoin again during his Saturday Night Live performance.

Buterin believes that Musk's fascination with Dogecoin is merely out of interest and has no malicious intent.

He said, "He (Musk) is a billionaire who runs Tesla and SpaceX and all these things, but it doesn't change the fact that he is ultimately a human being, and humans will be excited about Dogecoin. It's just a human instinct. I don't think Elon has any malicious intent in these things."

V God's Wrath SHIB

Another animal coin that has excited humans recently is the Shiba Inu, a meme coin that calls itself the "Dogecoin killer."

After Buterin donated SHIB, which was worth $1 billion at the time, to India's Covid-19 relief fund, Shiba Inu collapsed by about a third of its value in an instant. The sell-off highlighted some of the illiquidity issues with these altcoins. He said, "The problem with these Dogecoins is that their market is so small that you actually sell a billion dollars worth of Shiba Inu and end up not getting even a few million dollars."

Buterin also recently announced plans to burn, or remove from circulation, 90% of his SHIB holdings, which are all from on-chain donations. Buterin said he does not want to be a "center of power." In the interview, he emphasized that he does not want people who create altcoins to give him coins for "marketing" purposes.

Buterin said, "First of all, I don't really know or understand these projects. So, I can't endorse them. I saw in my wallet that there seemed to be thousands of altcoins called Freecoin. I don't even know what this thing is."

Buterin exhorted those who want to do good with crypto tokens to donate it directly to charity.

Government regulation risks always exist

The recent cryptocurrency crash is partly due to concerns about domestic regulation. China's three financial and banking regulators said on Tuesday that financial institutions and payment companies should not participate in any cryptocurrency-related transactions or provide cryptocurrency-related services to customers.

Buterin acknowledged in an interview with China News that regulation "is always an issue," even though concerns about an outright ban have receded. "It seems harder and less realistic to do something like this. At the same time, the government does have a lot of power to make it harder to participate in the cryptocurrency space." Even though blockchains are decentralized and governments can't take them down completely, they can block or restrict access.

"It's important to listen to regulators so that we can do our best to address any issues that may exist," he said, adding that the "regulatory" risk makes the relationship between cryptocurrencies and regulators "more adversarial."

The PoS revolution will significantly reduce gas fees

Billionaire Mark Cuban complained to The Defiant in February that Ethereum’s growth was being hampered by “ridiculous” transaction fees. Vitalik Buterin said that transaction fees are “extremely high” right now, and that the Ethereum blockchain can only process 20 to 50 transactions per second, despite very high demand.

But V God is still confident that transaction costs will fall because the Ethereum team is undergoing a large-scale technical transformation in order to allow Ethereum to scale rapidly. Ethereum is moving from the original algorithm of blockchain technology, "Proof of Work", to a newer concept called "Proof of Stake". In short, this upgrade means that participants in the Ethereum network will be properly rewarded to stay online and keep the network running. This will eliminate the energy consumption race brought about by proof of work.

Environmental problems

Buterin said that moving to proof-of-stake would reduce Ethereum’s energy usage by 1,000 to 10,000 times.

He said: "This will also effectively control the energy consumption of the Ethereum network from the equivalent of a medium-sized country to the energy consumption level of a village.

In stark contrast to the direction of Ethereum's improvements is Bitcoin, where Buterin said that concerns about Bitcoin's environmental impact may become a reality in the future. He said, "I absolutely think that these concerns are real, and resources are being consumed in large quantities. It's not a problem that will destroy the world, but it is definitely a huge disadvantage." Buterin added that this is not only reflected in the electricity consumption of Bitcoin miners, but also the hardware required to mine.

This is why Vitalik has been emphasizing that as Bitcoin develops and adapts to technological advances, there will be more calls within the Bitcoin community to either switch to proof-of-stake or move towards a hybrid model.

"If Bitcoin sticks to its original technology and doesn't make any changes, it will most likely be left behind forever," he said.

Image source: Internet

This article is from Bitpush.News. Please indicate the source when reprinting.