Ethereum cofounder and the project’s spiritual leader has warned over the direction of bitcoin and other cryptocurrencies—specifically the red-hot market for non-fungible tokens (NFTs).
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An NFT boom has turbocharged the price of ethereum, on which most NFTs are based, and helped ethereum rivals such as BNB, cardano and solana to surge. NFTs from one collection, the Bored Ape Yacht Club, trade for a minimum of around $300,000, according to NFT exchange OpenSea, and count celebrities like Jimmy Fallon, Serena Williams and Paris Hilton among owners.
Buterin warned that he sees “a lot of dystopian potential” in cryptocurrency, calling out the Bored Ape Yacht Club NFT collection specifically—”you have these $3 million monkeys and it becomes a different kind of gambling.”
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“Crypto itself has a lot of dystopian potential if implemented wrong,” Buterin told Time magazine in a wide-ranging interview, pointing to sky-high transaction fees and ostentatious displays of wealth by early bitcoin, ethereum, cardano and solana investors.
“The peril is you have these $3 million monkeys and it becomes a different kind of gambling,” he said. “There definitely are lots of people that are just buying yachts and Lambos.”
A blistering cryptocurrency rally that propelled the price of bitcoin, ethereum, solana, cardano, dogecoin and other coins to never-before-seen highs last year made many developers and traders overnight millionaires, with the combined value of the crypto market touching $3 trillion at the tail end of 2021.
NFTs are blockchain-based crypto assets that represent a digital item such as a piece of media, an image, a video or even land in virtual worlds. NFT total sales rocketed to an eye-watering $25 billion in 2021, according to data from market tracker DappRadar, however, sales have slowed so far into 2022.
“Ultimately the goal of crypto is not to play games with million-dollar pictures of monkeys, it’s to do things that accomplish meaningful effects in the real world,” said Buterin. “If we don’t exercise our voice, the only things that get built are the things that are immediately profitable. And those are often far from what’s actually the best for the world.”
Following the interview’s publication, Buterin clarified some of his comments, posting to Twitter: “I don’t hate Apes, I just want them to fund public goods.”
The ethereum price has this week soared over $3,000 as traders eye a looming upgrade that many think could help coin climb even further.
“Markets may realize in the next several months that ethereum is on course to become a global asset as adoption hits escape velocity, as the proof-of-stake transition transforms cash flows to real-income generation, and as environmental concerns ease,” Jamie Douglas Coutts, Bloomberg Intelligence senior market structure analyst, said in an emailed note.