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Ethereum Co-Founder Says Cryptocurrencies Are 'a Ticking Time Bomb' (bloomberg.com) 64

randomErr writes from a report via Business Insider (alternate source): Ethereum, the rival to bitcoin, has been on a tear. Its founders said the latest trend in the cryptocurrency space may not be as good for the cryptocurrency as some might think. Ethereum is up 1,700% over the last year, and that spike has occurred in tandem with the growth of the hottest new trend in fundraising: initial coin offerings. Approximately $1.2 billion has been raised by the new cryptocurrency-based capital raising method this year, according to Autonomous Next, a financial technology analytics service. It is a trend that has sparked excitement across Wall Street. But the cofounder of the company behind the cryptocurrency, Charles Hoskinson, told Bloomberg that initial coin offerings may not benefit Ethereum. "People say ICOs are great for ethereum because, look at the price, but it's a ticking time-bomb," said Hoskinson. "There's an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money."
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Ethereum Co-Founder Says Cryptocurrencies Are 'a Ticking Time Bomb'

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  • Woo-hoo! (Score:5, Funny)

    by cirby ( 2599 ) on Wednesday July 19, 2017 @07:47PM (#54843279)

    I can practically hear the GPU prices dropping!

  • by darthsilun ( 3993753 ) on Wednesday July 19, 2017 @08:11PM (#54843345)

    Cryptocurrency speculation reminds me of the pyramid "parties" in Los Angeles back in 1980.

    At least in a pyramid party if you were standing in line to get in and nobody else was getting in line behind you you could bail.

    If you were smart.

    There were a lot of not smart people.

    Those who cannot remember the past are condemned to repeat it. --George Santayana

    • I'm going to start my own so I can get a billion dollars out of people before it crashes. It'll be the Tickle-Me-Furby Coin.

  • A multibillionaire game of hot potato.

  • Well, yours sure was! Next time set the timer for a bit longer.

    Hilarious.

  • Not Quite (Score:4, Informative)

    by Anonymous Coward on Wednesday July 19, 2017 @08:45PM (#54843479)

    He said ICOs are a problem, not cryptocurrency per se. Basically, he's saying there are too many cryptocurrencies.

    • by Anonymous Coward

      The two correlate strongly. In a market of a fiat currency, imposed by organizations with no strength behind their fiat, the barrier to entry is minimal (The ICO) and consequently, crreating a nwe cryptocurrency and cashing out on the chumps is very easy and will eventually cause the death of cryptocurrency. The market will see that cryptocurrencies are inherently weak, and move back to commodities and currencies backed by nations.

  • by Anonymous Coward on Wednesday July 19, 2017 @08:53PM (#54843515)

    He says ICOs are a ticking time-bomb, not cryptocurrencies directly.

  • by Proudrooster ( 580120 ) on Wednesday July 19, 2017 @08:55PM (#54843521) Homepage

    When I buy a stock I don't actually get a stock certificate, instead I get a number in a computer or TOKEN.
    Could the whole thing come crashing down tomorrow?
    You Betcha!

    • A stock certificate has a tangible value, even if it's usually inflated several times that of the physical assets minus liabilities of the company divided by shares outstanding.

      And while we're at it: a dollar? At minimum it's the recognized currency for paying your taxes in the US, which gives it value in that it's necessary.

      A crypto-currency simply doesn't have anything backing it. Contrary to the assertions of advocates, it doesn't have energy, because I can't turn a Bitcoin back into the power that

      • by inking ( 2869053 )
        If anything, they are like bullion. Zimbabwe can print as much fiat as they like, but you can't print BTCs indefinitely, just create a new kind of BTC the acceptance of which would usually be backed by a higher tier coin. This is in fact quite similar to how the classic gold standard worked. I very much agree with your main statement though.
    • by MobyDisk ( 75490 )

      Stocks are not equatable to cryptocurrencies at all.

      Cryptocurrencies have nothing backing them. Stocks are backed by assets. Owning a share of stock means you own a percentage of the corporation's assets. This means cryptocurrencies are more like fiat cash and less like owning stock.

      When one says that the stock market may "crash" that means the value of the corporations may lose significant value. But as long as the corporation exists, the stock will have some intrinsic value. If the company owns 50,00

      • by Aaden42 ( 198257 ) on Thursday July 20, 2017 @09:08AM (#54845605) Homepage

        Owning a share of stock means you own a percentage of the corporation's assets.

        You might want to read the fine print on the "normal people" stocks that you can actually buy on an exchange or have in your retirement portfolio. All but the most preferred of preferred stock offerings are subordinate to basically everything in any kind of bankruptcy or reorganization. Generally the employees pensions come before common stock. You don't realistically own even a paper clip's worth of assets from any company you hold stock in. In the event of the company collapsing, the amount of leverage held by most companies means common stock isn't much better than junk paper in terms of what investors will recover. Literal pennies on the dollar would be a exceptionally good outcome.

        • by Anonymous Coward

          Generally the employees pensions come before common stock.

          Liabilities before equity. The problem as you mention is that by the time the company is bankrupt, it's soo deep in debt that it cannot meet payments---by that point, there's no equity left.

        • by inking ( 2869053 )
          How is a bankruptcy relevant to the fact that stocks constitute ownership shares of an enterprise? If you want higher security, buy the said corporation's bonds. There are stocks that waive your voting rights, but no stocks that supersede liabilities.
        • employees pensions

          Now I know you're making stuff up :-)

  • by JustAnotherOldGuy ( 4145623 ) on Wednesday July 19, 2017 @09:44PM (#54843735)

    Ethereum Co-Founder Says Cryptocurrencies Are 'a Ticking Time Bomb'

    No shit, Sherlock, what was your first fucking clue?

    Was it when an unknown hacker used a vulnerability in an Ethereum wallet client to steal over 153,000 Ether, worth over $30 million dollars? Was that the event that clued you in? Or was it the non-stop shitfest of Bitcoin thefts and scams and robberies?

    I've been saying for years that crypto currencies are a wonderful way to lose all your money in the blink of an eye. The security technology of crypto currencies is and always will be waaaaaaaaaaaay behind that of the skill needed to hack them.

    • by rtb61 ( 674572 ) on Thursday July 20, 2017 @01:15AM (#54844297) Homepage

      It's far smarter to kick back against the intended slavery of the banksters and corrupt governments and make cash king. Asking for permission with credit cards is going too far. Of course with legalised theft in the US, the feds and law enforcers being able to straight up steal your stuff without any conviction which is wildly unconstitutional, you have a real problem in the US. Don't let them fool you, a cashless capitalist society is a slave society.

    • That's the great thing about the American dollar ... the way it is immune to theft and scams.
      • That's the great thing about the American dollar ... the way it is immune to theft and scams.

        The difference between my American dollars and crypto currency is that if my bank is robbed, I still have my money.

    • by inking ( 2869053 )
      If you invest all your savings into any single asset, you are playing with fire. What that asset is is less important. Since all crypto depend on BTC and to some degree on ETH as their reserves, you cannot really diversify in crypto alone. However, you can diversify by buying crypto along with your usual instruments. Considering the ROI it has had, you can get very good returns with minimal risk by holding something like 10% or less of your portfolio in crypto.

      What I find somewhat unnerving is that most p
      • I have seen countless individuals on Reddit claiming that they are using it almost exclusively for their kid's college funds, retirement funds and so forth.

        Yikes. Some of those people (possibly a lot of them) are going to wake up one day and find out that their whatever-coin wallet has been hacked, and sometime during the night all of their money just went *bloop* and disappeared.

  • Clickbait headline (Score:3, Insightful)

    by Anonymous Coward on Wednesday July 19, 2017 @10:24PM (#54843879)

    He says ICOs are a timebomb. He did not say cryptocurrencies or blockchain are, they are are clearly here to stay. Currencies are insane volatile though. Still a poor headline


  • Dude with ETC (forked off blockchain) says things for much more successful ETH are bad and a "time bomb".

    Name one fucking crypto that is not a potential "time bomb". As if ETC didn't crash badly ever for practically no reason.

    Yes ICOs can be dangerous. Like any investment you could lose everything. Crypto is even more volatile so higher risk reward/loss.

    ETH is becoming more popular and common place. It's becoming a better platform every day. If there were a bunch of fraudulent business that scammed pe
  • Government imposed currency manipulation is not a ticking time bomb?
  • Is there some way to short cryptocurrency that doesn't involve the same bullshit wild west risks of getting involved with these bitcoin exchanges? I smell a lot of dollars to be made, but not if some asshole Russian can just steal them from me after my bet comes in.

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