Several players in the cryptocurrency industry expect “thousands of digital tokens likely to crash” and the number of existing blockchain systems to decline in the coming years.
There are currently more than 19,000 cryptocurrencies. There are also dozens of blockchain platforms. These systems are cited as the core technology on which many of the various cryptocurrencies are built.
The recent collapse of the so-called “stable” cryptocurrency terraUSD and the associated digital token Luna has caused a powerful shock to the entire market for cryptocurrencies, blockchain systems and NFT. This drew the world’s attention to the thousands of existing cryptocurrencies and to the question of whether they will all survive.
“One of the effects of what we saw last week is that we are at a stage where there are essentially too many blockchains, but too many tokens. This confuses consumers. The situation carries some risks for consumers, “Bertrand Pérez, CEO of Web3 Foundation, told CNBC during the World Economic Forum in Davos, Switzerland, last week. “It was similar in the beginning of the Internet – there were many dotcom companies and many of them were scams, they were of no value, but in the end everything rotten was cleared up. As a result, we now have many useful and legitimate companies. ”
Brad Garlinghouse, CEO of cross-border blockchain payments company Ripple, said there are likely to be “several dozen” cryptocurrencies that remain in the future. “I think it’s very debatable whether we really need 19,000 new currencies today. There are perhaps 180 currencies in the world of fiat currencies, “said Garlinghouse.
Guggenheim CEO Scott Minerd added further pessimism last week when he said most cryptocurrencies were rubbish. According to him, only Bitcoin and Ethereum will survive.
The comments from the industry come at a time when the cryptocurrency market continues to experience tense moments. Most virtual money has lost a significant part of its value and cannot be recovered. Many different blockchain platforms from Ethereum to Solana are vying for industry leadership.
Brett Harrison, chief executive of the FTX US cryptocurrency exchange, said hundreds of existing cryptocurrencies would not survive. “When you think of a blockchain, you have to know that in 10 years there will probably not be hundreds of different blockchains. “I think there will be some clear winners for different types of applications,” Harrison said. “We will see the market will solve the problem over time.”