With over 19,000 virtual currencies in existence, the cryptocurrency industry has likened the current state of the market to the early years of the internet. However, industry players said most of these coins will collapse.
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Several players in the crypto industry have told CNBC that thousands of digital tokens are likely to collapse while the number of existing blockchains will also decline over the coming years.
There are over 19,000 cryptocurrencies and dozens of blockchain platforms in existence. A blockchain platform, like Ethereum, is the underlying technology on which many of these different cryptocurrencies are built.
at recent days The breakdown of the so-called stabelcoin terraUSD algorithm And the numeric code associated with it is Luna, who sent shock waves in the marketIt highlights the thousands of cryptocurrencies that exist and whether they will all survive.
“One of the implications of what we saw last week in the Terra case is that we are at a point where there are basically too many blockchains, too many tokens. This is confusing for users. This also brings some risk to users,” said Bertrand Perez, President Web3 CEO, told CNBC at the World Economic Forum in Davos, Switzerland, last week.
“Just like in the beginning of the internet, you had a lot of internet companies and a lot of them were scams, they didn’t bring any value and all of that got dumped. Now we have very useful and legitimate companies.”
There are likely to be “dozens” of cryptocurrencies that will survive in the future, Brad Garlinghouse, CEO of cross-border payments firm Ripple, said.
“I think there is a question as to whether we need 19,000 new currencies today,” Garlinghouse said. “In the monetary world, there are probably 180.”
The comments from the industry come as the cryptocurrency market continues to feel the pressure. Bitcoin has fallen more than 50% from its high in November, with many other digital coins dropping sharply from their all-time highs.
Many different blockchain platforms from Ethereum to Solana are vying for a leadership position in the industry. But Brett Harrison, CEO of cryptocurrency exchange FTX US, said that not all of the hundreds that are there will survive.
“When you think about blockchains…there will probably not be hundreds of different blockchains in 10 years, I think there will be two clear winners for different types of applications,” Harrison said.
He added, “We will see the market … that will be produced over time.”
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