Ether Founder Doubts Silicon Valley Threat: The Week in Crypto
What You Need To Know
Ethereum co-founder Vitalik Buterin doesn’t see big players like Facebook and Square posing much of a threat.
The engineer widely recognized as the inventor of the world’s most-used blockchain cast doubt on Square CEO Jack Dorsey’s plan for the company to create a new business focused on decentralized financial services that uses Bitcoin. The largest cryptocurrency, Buterin said in an interview with Bloomberg TV’s Emily Chang, doesn’t really have the functionality to do that as it was designed largely to be a “currency of the house.”
“On Ethereum there’s native functionality that allows you to essentially directly put ETH or Ethereum-based assets into these smart contracts, into these lock boxes, where there’s then arbitrary conditions that can govern how those assets get released,” said Buterin. “Jack is basically going to have to essentially create his own system that enforces those rules.”
Zuckerberg’s idea to turn his Facebook into a “metaverse company” was also met with skepticism by the crypto mogul. “Metaverse” refers to a vision of an internet-enabled virtual world where people have avatars and interact with digital assets and even corporeal objects via augmented reality. Zuckerberg is clearly trying to anticipate the next phase of the internet “before the rest of the world goes in some different direction and Facebook is sort of left in the dust,” Buterin said.
There’s “just a huge amount of mistrust” about Facebook, Buterin said, so constructing its own platform could prove ill-fated. He recommended Zuckerberg build on the existing blockchain instead.
Where will Ethereum be in five to 10 years?
“Hopefully running the metaverse.” Buterin said.
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Key Coverage
By The Numbers
- $80 billion The market value of Cardano, which is now the third-biggest cryptocurrency and has gained 40% this week.
- 881% The increase in crypto adoption globally in the past 12 months, according to Chainalysis.
- $2.1 trillion The market cap of the crypto universe—which moved above $2 trillion again over last weekend.
Why It Matters
Global crypto adoption rose some 881% in the past 12 months, according to Chainalysis. The firm sees institutional markets as crucial — but aimed to highlight the countries with the greatest crypto adoption by retail investors. It focused on use cases related to transactions and individual saving, rather than trading and speculation. Top-ranked countries are Vietnam, India, Pakistan and Ukraine.
“In emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions,” Chainalysis said in the report. It added that “adoption in North America, Western Europe, and Eastern Asia over the last year has been powered largely by institutional investment.”
China and the U.S. both dropped in the rankings, primarily because peer-to-peer trading volume declined. Last year, China ranked fourth and the U.S. sixth. This year, the U.S. is eighth and China 13th.
Quotable:
“New technology should not cause us to change the fundamental protections in our securities and other financial markets.”
Former U.S. SEC Chairman Jay Clayton Read more of Clayton’s thoughts here.
Of Note:
— Cardano is now the third-largest cryptocurrency amid optimism about smart contracts.
— Binance is hiring — to lead money-laundering reporting and in regulatory areas generally.
— Crypto’s “opportunity of a lifetime?” OnlyFans is banning porn.
Ignore the industry doomsayers. New reporting requirements for digital assets are a good first step toward getting people to pay what they owe.
