With over 19,000 virtual currencies in existence, the cryptocurrency industry has compared the current state of the market to the early years of the Internet. However, industry players said that most of these coins will fall.
Nurphoto | Getty Images
Several cryptocurrency industry players have told CNBC that thousands of digital tokens are likely to collapse, while the number of blockchains in existence will also drop in the coming years.
More than 19,000 cryptocurrencies exist and dozens of blockchain platforms exist. A blockchain platform, such as Ethereum, is the underlying technology on which many of these different cryptocurrencies are built.
Recent The collapse of the so-called algorithmic stablecoin TeraUSD and its associated digital token Luna, which sent Shockwaves Through the MarketHas shed light on the thousands of cryptocurrencies in existence and whether they will all survive.
“One of the implications of what we saw last week with the Terra issue is that we are at a level where there are basically too many blockchains, too many tokens. And it’s confusing users. And it’s also some risk. to users,” Bertrand Perez, CEO of the Web3 Foundation, told CNBC last week at the World Economic Forum in Davos, Switzerland.
“Like in the beginning of the Internet, you had a lot of dotcom companies and a lot of them were scams, and not bringing in any value and all that was cleaned up. And now we have a lot of useful and legitimate companies.”
Brad Garlinghouse, CEO of cross-border blockchain payments company Ripple, said the cryptocurrency is likely to “score” in the future.
“I think there is a question about whether we need 19,000 new currencies today. In the fiat world, there are probably 180 currencies,” Garlinghouse said.
Guggenheim Chief Investment Officer Scott Minrad added more pessimism last week when he said Most crypto is “junk” but that Bitcoin And ethereum will be saved.
The comments come from the industry as the cryptocurrency market is feeling the pressure. Bitcoin is down more than 50% from its all-time high in November, with many other digital coins sharply lower from their all-time highs.
Many different blockchain platforms, from Ethereum to Solana, are vying for leadership positions in the industry. But Brett Harrison, CEO of cryptocurrency exchange FTX US, said the existing hundreds will cease to exist.
“When you think about blockchain… there probably won’t be hundreds of different blockchains in 10 years, I think there will be some clear winners for a wide variety of applications,” Harrison said.
“And we’ll see the market … sort it out with time,” he said.