Ethereum Co-Founder believes speculative ‘trader types’ are driving crypto price
INTERNATIONAL - Ethereum co-founder Joseph Lubin said this past year’s surge in the value of digital currencies was a bubble and the burgeoning ecosystem is stronger because of it even as prices tumble.
“We’ve seen six big bubbles, each more epic than the previous one, and each bubble is astonishing when they’re happening but when you look back they look like pimples on a chart,” Lubin said during an interview on Bloomberg Television.
“With each of these bubbles we have a tremendous surge of activity and that’s what we’re seeing right now.”
Lubin, who is the chief executive officer at ConsenSys Inc., said developer activity rose by “two orders of magnitude” since prices jumped last year.
He added that “trader types” are driving volatility and isn’t concerned that the slump in prices will slow down the development of core infrastructure and adoption.
After leaving Ethereum, a blockchain-based platform for smart contracts and applications, Lubin founded ConsenSys, which helps startups build on top of the Ethereum network.
Lubin said ConsenSys has 1,100 employees who build infrastructure for the Ethereum ecosystem and focus on products, consulting for enterprises, governments and central banks, and capital market activity. He said it cost under $100 million (R1437m) to run ConsenSys last year and the figure will be higher this year.
Ether skyrocketed over $1,000 in February in part as startups built projects on top of the Ethereum blockchain and sold digital tokens in exchange for Ether in crowd sales known as initial coin offerings.
Now, some of those projects are cashing out, contributing to Ether’s slump. The token has tumbled by as much as 27 percent this week, the biggest two-day drop since February. The price slumped to as low as $251, the lowest since November.
Lubin foresees a future where Ethereum will be significant among hundreds of other protocols, which will co-exist.
“This is what it feels like to be living in exponential times,” he said.