Explosive Crypto Growth Days Are Over, Ethereum Co-Founder Says

  • Blockchain growth and adoption is already approaching its "ceiling", or maximum potential, Ethereum co-founder Vitaiik Buterin said.
  • Buterin added those interested in cryptocurrencies need to get involved in a more in-depth manner.
  • Crypto users should be encouraged to explore "real applications" and the "real economic activity" associated with digital currencies, he noted.

Ethereum co-founder Vitalik Buterin recently told Bloomberg the blockchain industry has already experienced explosive, or exponential, growth and “there isn’t an opportunity for yet another 1,000 times growth in anything in this space anymore.”

Blockchain Growth Approaching "Ceiling"

Buterin added that the “average educated person” has heard of distributed ledger technology (DLT) by now at least once. He also remarked:

“The blockchain space is getting to the point where there’s a ceiling in sight.”

Vitalik Buterin

As such, we can no longer expect more significant “growth in anything in [this] space,” Buterin said. Going on to explain the growth and adoption of bitcoin (BTC) and other cryptocurrencies, Buterin added that marketing by the blockchain community during the first six or seven years of their existence helped people become more aware of them.

According to the Russian-Canadian programmer, the marketing strategy that has been used so far to encourage people to use digital currencies is “getting close to hitting a dead end.” Those who are now genuinely interested in cryptos need to get involved in exploring the “real applications of [their] real economic activity,” Buterin noted.

Notably, the blockchain developer’s comments come at a time in which the Ethereum blockchain’s native token, ether (ETH), had dropped below the $200 mark. Ether is currently trading at $201according to CryptoCompare data, and its value has now declined well over 70% this year.

Cryptocurrency Prices Decline Further

Bitcoin, the flagship cryptocurrency, has also plummeted and is trading slightly below $6.400 at press time. This, after briefly surpassing the $7,000 mark on August 28. Most market analysts have attributed the recent (and further) drop in cryptocurrency prices to reports claiming Goldman Sachs postponed its plans to launch a crypto trading desk. The financial institution's CFO has since then revealed the Goldman Sachs is still working on it.

As CryptoGlobe reported, Stephen Innes, the chief investment officer at SFG Alternatives, remarked that Goldman Sachs delaying the launch of its crypto trading platform would be “a huge blow” to the digital currency market.

Innes said that cryptocurrencies will remain “thinly traded” because of the lack of proper “regulatory oversight” and the “intense, intense scrutiny” over fraudulent activity associated with them. It is also unclear whether bitcoin and other cryptos are currencies or commodities, and if they’re supposed to be a store of value, they’re doing a “very poor” job of retaining value, Innes argued.

Central Banks and Cryptocurrencies: Natural Born Enemies, or Soon-to-Be Friends?

Oli Weiss

The frosty and (some have speculated) internationally coordinated response from central bankers to Facebook’s Libra was received with little surprise by crypto entrepreneurs and investors.

Officials from across the G7 economies were keen to stress not only the regulatory hurdles Libra would need to clear before it got the green light, but also their ongoing commitment to the tacit proposition that there must remain a legal and technical firewall between fiat and cryptocurrencies.

Steve Mnuchin, U.S .Treasury Secretary, was at pains to emphasize that Facebook’s proposed coin is “a very long way” from being approved by U.S. regulators, and the Governor of the Bank of England, Mark Carney, has been quoted expressing similar sentiments that Libra must be “rock solid” well before it’s launch.

However, it is French Finance Minister, Bruno La Maire, who has been most explicit in a recent interview with the Italian newspaper Corriere della Sera where he stated that, “the red line for us is the Libra must not transform into a sovereign currency.”

Inside Singapore’s Crypto Laboratory

This context of mistrust and sometimes outright hostility from central bankers towards cryptocurrencies makes two developments in Singapore all the more significant; firstly Project Ubin led by the Monetary Authority of Singapore, and secondly the recent decision to allow five new digital banking licenses.

Project Ubin is a joint venture by the de facto central bank of Singapore and leading global financial institutions including HSBC, JP Morgan and Bank of America Merrill Lynch. In essence, the project seeks to explore the possibility that blockchain distributed ledger technology can be used to make the settlement of inter-bank payment quicker and reduce processing times whilst maintaining high levels of security and data privacy.

So far, the project has begun to demonstrate that a tokenized Singaporean dollar can in fact function as a method of inter-bank settlement for day-to-say business, and work has commenced between the Project Ubin teams and the Bank of Canada on how the system can be scaled to allow for international payments.

One obvious question arises from this: if this system works and could hypothetical be generalized elsewhere, what would this mean for the role of central banks in the future?

One possible answer is also starting to emerge from Singapore, where Ministers have just approved the issuance of banking licenses to up to five new digital banks.

This further enshrines the contestability of the financial sector in Singapore, and provides room for the type of new, innovative entrants likely to take advantage of Singapore’s world-class crypto infrastructure and flexible regulatory environment.

As such, there are signs emerging that the cold war between central bankers and crypto innovators may be starting to pass, and a strategic partnership between the two could be possible in other financial centers like Singapore. For now, one thing is certain: Singapore is, and almost definitely will remain, one of the key centers of crypto and fintech dynamism, due in part at least to the bold actions of the Singapore Monetary Authority.