Charles Hoskinson, former chief executive and Ethereum co-founder, says change is coming to the world of cryptocurrency in the form of an inevitable crash — and a follow-up consolidation that will clear the unserious players from the board.
“My personal opinion is that we're going to see a consolidation after a crash,” Hoskinson told CNBC.
Hoskinson now runs blockchain research firm IOHK — and a number of currencies his firm oversees have seen big recent bounces in value, including Cardano.
Bitcoin has been the headliner with its price currently in the five digits — but lesser-known digital tokens have ridden the rising crypto wave, and the overall market cap of digital currency in general has swelled as a result to three-quarters of $1 trillion.
“What's going to occur is a lot of these ventures that don't have strong fundamentals, don't have good tech, or just unrealistic projects, they will eventually run into some major wall they can't quite overcome. They will fracture up and you will see a lot of them are certain to fail,” Hoskinson noted.
But failure, he noted, may take a while to come — because many of these products are quite well-financed.
“The problem is a lot of them have a lot of money,” Hoskinson said. “It's really hard to fail when your burn rate is $5 million or $10 million a year, and you have $1 billion of capital.”
On Sunday, dogecoin, a meme-inspired cryptocurrency that was introduced as a joke in 2013, saw its market value increase to $2 billion just days after hitting $1 billion. Dogecoin’s founder Jackson Palmer found this somewhat concerning, since the project hasn’t released a software update in more than two years.
“I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over two years has $1 billion market,” he said on Twitter.