Former chief executive and co-founder of Ethereum, Charles Hoskinson claims that even after bitcoin alternatives that have no core fail, cryptocurrency markets will strengthen.
Hoskinson, during a CNBC interview, said “My personal opinion is that we’re going to see a consolidation after a crash.” Hoskinson manages a blockchain research firm IOHK, and previously oversaw Ethereum. This company developed the underlying technology for the cryptocurrency better known as ether, or Ethereum.
Cardano, a cryptocurrency managed by Hoskinson’s company, as well as other unconventional cryptocurrencies have increased considerably in recent weeks as investors look past the market’s best-known cryptocurrency, Bitcoin. For example, Ripple’s XRP, became the second-largest cryptocurrency in December by passing Ethereum.
The technology that supports cryptocurrencies, blockchain, does not use a centralized server, but makes records of all transaction of digital currencies on a circulated network.
A plethora of lesser-known digital tokens have risen to high levels over the last few weeks. Rising values has sent the market capitalization of virtual currencies up to three quarters of $1 trillion.
Hoskinson discussed his concerns about “unrealistic” cryptocurrency projects entering the space.
Hoskinson said, "What's going to occur is a lot of these ventures that don't have strong fundamentals, don't have good tech, or just unrealistic projects, they will eventually run into some major wall they can't quite overcome. They will fracture up and you will see a lot of them are certain to fail."
Hoskinson, an entrepreneur, further commented that many low-level cryptocurrency projects might stay in the market since they have funding behind them and are able to sustain themselves.
“The problem is a lot of them (cryptocurrencies) have a lot of money, “said Hoskinson. “It’s really hard to fail when your burn rate is $5 million or $10 million a year, and you have $1 billion of capital.”
Dogecoin, a dog-inspired cryptocurrency introduced as a joke in 2013, found that its market value increased to $2 billion just one day after hitting $1 billion. Dentacoin, a dental care-focused digital currency that calls itself “the blockchain solution for the global dental industry,” surpassed $2 billion in market capitalization, reported Coinmarketcap data.
Jackson Palmer, Dogecoin’s developer told the market it was alarming that a virtual coin he created reached such a high level despite the fact a software update on the product hasn’t been released in over two years.
“I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over two years has a $1 billion market”, puzzled Palmer on Twitter.