There is a probability that thousands of digital tokens will collapse as will the number of blockchains in existence as per the information to CNBC by various cryptocurrency industry players.
There are over 19,000 cryptocurrencies in circulation, as well as dozens of blockchain platforms. A blockchain platform, such as Ethereum, serves as the foundation for many of these different cryptocurrencies.
The latest collapse of the alleged algorithmic stablecoin terraUSD and its linked digital token luna, has given the entire market a shock resulting in the doubting the survival of the thousands of cryptocurrencies in existence.
Web3 Foundation’s CEO Bertrand Perez at the World Economic Forum in Davos, Switzerland, last week informed CNBC that one of the impacts of the Terra issue witnessed last week was that there were too many blockchains and tokens in existence which is confusing the users. This also poses some risks for users.
This is similar to the scenario when the internet was introduced newly. There were lots of dotcom companies with most of them being a scam and didn’t provide any value. This was cleared finally and currently, there are so many useful and authorized companies.
CEO of Ripple (the cross-border blockchain payments company) – Brad Garlinghouse stated that “scores” of cryptocurrencies will likely remain in the future.
He also said that there is a debate regarding the need for the 19,000 new currencies at present. There are probably 180 currencies in the fiat world.
There was further negativity added last week when Scott Minerd – Guggenheim Chief Investment Officer stated that almost all crypto is “junk” however bitcoin and Ethereum will get through.
The industry comments come as the cryptocurrency market remains under pressure. Bitcoin is down more than 50% from its November record high, and many other digital tokens are down significantly from their all-time highs.
Various blockchain platforms, from Ethereum to Solana, are contending for industry leadership. However, Brett Harrison, CEO of cryptocurrency exchange FTX US, believes that the hundreds of cryptocurrencies currently in existence will not all survive.
As per Harrison, in ten years, there will be a couple of evident winners for different types of applications and there apparently won’t be hundreds of various blockchains and also added that we’ll see what the market does… we’ll figure that out over time, he added.
