Cryptos Are An 'Intellectual Experiment' That 'May Not Work', Xapo Founder Says

  • "It would be irresponsible" to not acknowledge that cryptos are still an experiment that could fail, Xapo founder, Wences Casares said.
  • He added that the chances of cryptocurrencies being successful are now greater than them failing.

Wences Casares, a board member at PayPal and the CEO of Xapo, a Hong Kong-based firm that focuses on cold storage solutions for cryptoassets, recently stated that cryptocurrencies are an “intellectual experiment" that could end up failing, but either way will allow us to learn.

"Irresponsible" To Not Admit Cryptos May Fail

Casares explained that the idea of having decentralized, digital currencies is an experiment because they “may or may not work.” He added that if cryptos ultimately fail, they could still be considered a good “learning experience.”

When questioned about how someone like him - who has “built a business on bitcoin” - thinks cryptoassets are still an experiment, Casares said:

I think it would be irresponsible to not acknowledge that it could not work. The chances of this experiment not working are non-trivial. And, it’s important for people who know that, like myself, to always acknowledge that and let people know that.

Wences Casares

However, Casares also suggested that substantial progress has been made and that the chances of cryptocurrencies evolving and achieving mainstream adoption are greater than them failing.

Cryptos Are Currently "Like 1992 Internet"

There may already be crypto-related firms such as Coinbase that are seeking multi-billion dollar valuations, but Casares cautioned that “technology is made by humans” who are “fallible.” This means that “we could find some [big problem] that we haven’t found in ten years [which might] render the system worthless,” the Argentinian entrepreneur and philanthropist noted.

Responding to what he thinks has “a good chance of succeeding”, Casares said: “We are in the equivalent of 1992 for the internet. In 1992, we didn’t call it the internet, we just called it TCP/IP” - which is now the standard communications protocol for the web.

He continued to explain that “all you needed to know back then was there was this new protocol that moved information from anywhere to anywhere. Two, it [did this] in real-time. And three [it was done] for free.”

Although streaming HD videos and high-quality downloadable images were not available during the early days of the internet, they have now become quite common because the “internet experiment” was successful.

"Three Things" Cryptos May Give Us

According to Casares, there are “three things” that crypto currently does - with the first one being that blockchains have allowed us to build computer systems that are “sovereign”, or in other words, “autonomous.”

Casares continued: 

Blockchains ‘answer to noone’. They have their own rules … [and] it’s important because it has never been accomplished before … other important attributes [are that blockchains are] uncensorable … nobody can keep you from sending a transaction or receiving a transaction, or holding value in it.

Wences Casares

The third thing crypto has given us is the concept of having deflationary currency, as there can only be a maximum of 21 million bitcoins in existance, Casares pointed out.

Bitcoin To Change Money "Like Internet Changed Information"

Assuming cryptos succeed, then bitcoin (BTC) would become “a global non-political standard of value” and a “global non-political standard of settlement” - according to Casares. Interestingly, the Xapo founder, who has previously predicted a $1 million bitcoin price, said he dosn't see cryptos replacing fiat currencies.

He explained that:

bitcoin could change money the way the internet changed information but this idea that a blockchain can be used to change an asset that already derives its value from a central authority like title insurance, or banks, or securities settlement is really non-sensical. It’s not true and it doesn’t make any sense.

Wences Casares

Hacked Exchange Cryptopia Enables Trading in 40 Different Currency Pairs

New Zealand-based digital asset exchange, Cryptopia has reportedly resumed trading on its exchange as it is now allowing 40 different trading pairs. This, after Cryptopia recently experienced from several different security breaches.

Support For Bitcoin, Litecoin, Dogecoin Pairs Added

Cryptopia’s management announced (via Twitter on March 18th) that it is planning to expand its list of coins which will again be supported on its trading platform. As noted on Cryptopia’s official support website, the exchange has enabled several different trading pairs (as of March 19th, 2019) with major cryptocurrencies. These include bitcoin (BTC), litecoin (LTC), and dogecoin (DOGE).

In response to Cryptopia’s announcement, Twitter user @dgb-chilling, a supporter of DigiByte (DGB), a cryptocurrency that uses five different mining algorithms, said that he had emailed the exchange’s support team to inform them regarding the coin’s latest update (version 6.17.2). He added that “an upgrade was recommended but not mandatory.”

Meanwhile, Chuck Norris (@CryptoTweet6) remarked: 

Now this is good news! Let’s hope the rest of the coins will be released for trading swiftly.

Other users also considered it “good news” that the compromised cryptoasset exchange was gradually resuming its operations. However, one social media user asked when Cryptopia would start enabling deposits while another inquired about why his ARK coins were still not recoverable from the trading platform. He claimed that he had deposited 1,000 ARK, currently valued at around $628, (a popular proof-of-stake based coin) on Cryptopia. The user also complained that his coins were missing “missing because [the exchange] did not update the ARK wallet."

Tens Of Millions Of Dollars Stolen In Hack

On February 27th, 2019, Cryptopia’s management announced that it was “assessing the impact incurred as a result of the hack” which led to the theft of tens of millions of dollars in cryptocurrency. Last month, Cryptopia’s support team had also estimated that the total loss incurred due to the security breaches was of around 10% of its total holdings (in the worst-case scenario).

Notably, the exchange’s official Twitter account had been silent for several weeks (since Feburary 14th). However, it released several announcements, starting in late February, in which it revealed that its staff members were working on securing each customer’s account individually. Cryptopia’s management also noted that it was taking the appropriate measures to ensure that its trading platform is secure when it is officially back online.