Long-time crypto miner confesses: “I was wrong about Ethereum,” predicts catastrophic crash of numerous crypto currency bubbles
By: Ethan Huff
NewsPrepper.com
June 20, 2017
So-called “cryptocurrencies” are becoming a dime a dozen these days, with new blockchain platforms popping up on the regular. But how stable are they? One long-time investor says not very, admitting in a recent blog post that popular systems like Ethereum aren’t legitimate stores of value like many people think they are, and that once the bubbles burst it will be a total catastrophe for investors who don’t really know what they’re doing.
Similar in many ways to Bitcoin, Ethereum is an open-source, public, blockchain-based distribution platform that facilitates the exchange of items of value – in this case, decentralized applications. Bitcoin represents an actual currency of exchange, whereas Ethereum functions more as a system of exchange, with the “currency” being programming code and other digital assets.
While Bitcoin “miners” dig up bitcoins to be exchanged in a peer-to-peer electronic cash system that runs on its own unique blockchain, Ethereum miners dig up “Ether,” a form of digital currency often referred to as a token that helps fuel the network. These tokens are what gives Ethereum a perceived sense of value, though even seasoned Ethereum investors are starting to question its long-term viability.
“I do admit I didn’t see this Ethereum bubble coming,” writes an Ethereum investor who goes by the screen name of “WhalePanda” on Medium.com. “Ethereum’s sole use case at the moment is ICOs” (Initial Coin Offerings, which serve as “a fundraising tool that trades future cryptocoins in exchange for cryptocurrencies of immediate, liquid value“) and token creation.
In other words, most of the transactions that take place using Ethereum are based on the future hope of another cryptocurrency coming into existence that will actually hold a store of value. It’s like gambling on something that isn’t even real yet, but that eventually could be. It’s a risky prospect and one that investors are thinking twice about as the bubble of hype and speculation surrounding the concept faces an inevitable burst.
“Ethereum is not a store of value,” WhalePanda admits. “It isn’t capped.”
If something exists digitally in limitless quantities, does it actually hold any value?
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