Vitalik Buterin: What Were You Thinking?

Enough with all the stuff over fake news versus real news.  It is hard to find reality these days. What information is coming from trustworthy sources versus those with a secret interest to promote?  I am not talking about the stuff coming from the White House, FBI, CIA or any of those folks. I am talking about something much more important.

What I am getting at is news in the crypto world where our digital assets are invested. Just the other day, I wrote a piece raising the question whether crypto usership for acquiring goods and services was falling.  Those who collect data on these trends seem to think it is.

There could be lots of reasons for this, both in the method of collecting the data as well as real human behavior.  One thing seems clear, crypto prices keep getting further away from those frothy levels of last Christmas.

We also have to keep in mind that there is no such thing as long term history with crypto. It is inherently volatile.  So the analysis of data can change quickly.

Goldman Sachs Was Bad Enough

Last week’s conflicting headlines coming from Goldman Sachs via Business Insider claiming that the big investment bank was pulling back on its plans to open a crypto trading desk in favor of a more limited commitment to essentially offering a wallet for big institutional investors sent a quick shock through prices.  It didn’t matter that other sources at Goldman merely claimed they were delaying the rollout.

What’s With Vitalik?

So if you are the founder of some pretty amazing technology whose success ultimately depends on mass adoption, you would expect to hear a constant barrage of exciting news about your project, kind of like Elon Musk.

But not Vitalik Buterin.  Over the weekend headlines from Ethereum World News read: “There Isn’t An Opportunity For Another 1000x Growth”.

The source of the headline comes from Bloomberg News who interviewed Buterin at the recent Ethereum & Blockchain Conference in Hong Kong. Below is Vitalik’s direct quote:

“The blockchain space is getting to the point where there is a ceiling in sight.  If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”  Buterin’s remarks were described as a shock to those attending the conference.

Nobody is challenging the depth of Buterin’s knowledge, but what is happening in that part of his brilliant mind that is devoted to common sense?  As the co-founder of Ethereum whose success thus far is build on applications developed by others, why would you want to disparage the future?  It positively makes no sense.

What makes sense, as the article points out, is a long-term growth plan that encourages a steady flow of adoption and real world use.  Bravo for that observation and one I totally agree with. But that wasn’t working at the conference. “That strategy (marketing and worldwide adoption) is getting close to hitting a dead end.”

But here is the killer. Rather than focusing on evolutionary developments like Bitcoin’s Lightning Network or Ethereum-based Raiden Network, Buterin chooses to dwell on the obvious.

“. . . every present day existing blockchain, including ETH and BTC, sucks. . . . “.

Connecting the Dots

Whether accurate or not, Buterin’s opinions, at best, were ill timed.  If you believe them to be accurate, why would you invest in Ether or any other crypto?  It would make no sense to do so. On the other hand if his comments were cleverly crafted to discourage rampant speculation and volatility, that is not his job.  In fact, it is a form of manipulation. That is not smart.

Featured image courtesy of Shutterstock. 

James Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.
  • I agree. When I read his comments the first thing I thought was that he was having one of those days when you just want to quit and are fed up with the job you are doing. I mean if that’s how he really thinks why would you bother with Ether. I recall a previous article last week where another developer was saying that ether would be dead if payments for the ether network network were not required to be made in ether and he also agreed with that developer. It is a poorly timed quote; but, keep in mind d he is also quite young and immature. There is an incredible amount of opportunity in the crypto space. It seems like every day I receive a major headline about institutions or governments doing something new with blockchain or crypto. It does make me question ether though. Especially with all of the cryptos that have left it’s network in favor of their own like EOS and others.

  • Thanks for your comments. Yes we understand the he is quite young and immature. Unfortunately when you create something worth billions in market value, you better start to grow up fast. Otherwise there are these amazing new services call public relations. Thanks again for your spot on observations.

  • Thanks for your comments. Yes we understand the he is quite young and immature. Unfortunately when you create something worth billions in market value, you better start to grow up fast. Otherwise there are these amazing new services call public relations. Thanks again.

  • “that is not his job.”

    I disagree.

    As the lead architect of a software project, it *is* his job to ensure that the software is not misused in a way that allows someone to gain an unfair advantage over the other users of that software.

    Therefore, his comments were spot on.

    Were they ill-timed? Sure. No doubt on that. But consider this: Pretend he didn’t say anything at all. Do you really think we are going to see another bubble in the next 1-2 years? The traditional markets enter bubble status when some new development happens to catch on and gain mass popularity (house flipping in 2006 for example)

    Even if he said nothing, the ebbs and flows of the market will prevail, and the crypto space would likely still not enter another bubble for a few more years to come.

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