Several cryptocurrency industry players have said that thousands of digital tokens could collapse, while the number of existing blockchains will also decrease in the coming years.
There are over 19,000 cryptocurrencies and dozens of blockchain platforms. Blockchain platforms like Ethereum are the underlying technology on which these different crypto are built.
The recent debacle of the so-called algorithmic stablecoin TerraUSD and its related digital token Luna sent shockwaves through the market, drawing attention to the thousands of cryptocurrencies in existence and whether they all survive.
“One of the effects we saw with Terra last week was that we were at a stage where we basically had too many blockchains, too many tokens. It was confusing for users. It also caused some confusion for users. Risk,” Bertrand Perez, CEO of the Web3 Foundation, told CNBC last week at the World Economic Forum in Davos, Switzerland.
“Like the dawn of the internet, there were a lot of online companies, many of which were scams that didn’t bring any value and everything was removed. Now we have very useful and serious companies.”
Brad Garlinghouse, CEO of cross-border blockchain payments company Ripple, said there could be a “quantity” of cryptocurrencies in the future.
“I think the question is whether we need 19,000 new currencies today. In the fiat world, there could be 180 currencies,” Garlinghouse said.
Scott Minerd, chief investment officer at Guggenheim, took his pessimism further last week, saying that most cryptocurrencies are “junk,” but bitcoin and ethereum will survive.
The comments from industry insiders come as the crypto market remains under pressure. Bitcoin is down more than 50% from its all-time high set in November, and many other digital tokens are well below their all-time highs.
From Ethereum to Solana, many different blockchain platforms are vying for industry leadership. But Brett Harrison, CEO of cryptocurrency exchange FTX U.S., said that not all of the hundreds that exist today will survive.
“If you think about blockchain … there probably won’t be hundreds of different blockchains in 10 years, and I think there will be some clear winners for different types of applications,” Harrison said.
“We’ll see the market … address this over time,” he added.
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