For Ethereum co-founder Vitalik Buterin, the recent price crash is little more than a lesson, the the crypto markets will learn. After all, the challenges that cryptocurrencies are now facing are not insurmountable.
The crypto crash of the past few days has shocked investors around the world.
Vitalik Buterin isn’t among them – even though the meltdown wiped out a huge chunk of his personal wealth. https://t.co/TkPlysfuNo pic.twitter.com/yuxxsPrsLB— CNN (@CNN) May 20, 2021
Elon Musk’s influence will wear off
First of all, Buterin advises a certain calm when it comes to the crypto influencer Elon Musk. One has to understand that the person Musk causes a considerable stir. After all, he is not used to such a doctorate.
Musk has only been tweeting intensively on the crypto topic for a little more than a year. A certain unrest is to be expected there.
Once market participants had got used to attempts to influence such as Musk’s, these would have less of an impact.
“Elon won’t have that influence forever,” Buterin told CNN. Crypto prices are inherently susceptible to “disruptions”, but over time a kind of immune system will develop against it.
Incidentally, he does not assume that Musk’s statements are motivated by any form of malice. Apart from all his billions, Musk is above all human. And people get upset about “dog coins”, so Buterin.
Fear of regulators relatively unfounded
Buterin is relatively unafraid of regulatory restrictions. Of course you have to listen to the regulatory authorities and always try to dispel their concerns in a meaningful way.
But he cannot imagine a concerted action by governments to ban crypto currencies. After all, it is very difficult to really prevent crypto down to the protocol level.
At best, governments could use their power to “inflict pain on the crypto market.” Disputes could “become more confrontational than they should be.”
Change to PoS required
Buterin sees another challenge in the consensus method Proof-of-Work (PoW), which both Bitcoin and Ethereum currently use. But while Ethereum wants to switch to the more energy-efficient proof-of-stake (PoS) with version 2.0, such efforts have not yet been made with Bitcoin.
Buterin sees this as a danger for the top dogs in the crypto world. After all, a reduction “from the energy consumption of a medium-sized country to the energy consumption of a village” could already be achieved with his Ethereum network.
The resource consumption of the PoW is “definitely huge”. Buterin warns if Bitcoin did not switch to a different consensus method, BTC could be overtaken by other protocols.
