Vitalik Buterin Sees Market Crash as Positive for Crypto
The sharp price drop cleans out bad business models in the market, says Ethereum's creator.
The sharp price drop cleans out bad business models in the market, says the Ethereum creator.
Vitalik Buterin believes the sharp correction in the crypto market is a positive development. He said this in an interview with former Bloomberg columnist Noah Smith. Such price drops are good at "bringing problems to light" and sweeping "unsustainable business models" out of the market, he said.
"During a crash, that doesn't work anymore," says Buterin. He points to the example of Terra (LUNA). The stablecoin ecosystem rose into the top 10 of cryptocurrencies from 2020 and crashed this spring by 99 percent.
In the midterm, Buterin believes crypto prices will settle down and approach the volatility levels of gold and the stock markets. Ethereum is currently in the final phase of its major update, the Merge. The plan is to make the world's second-largest blockchain 99 percent more energy-efficient by switching the consensus algorithm to "Proof of Stake". This also brings risks, such as potential centralization.
The Merge is just one part of Ethereum 2.0
The world is counting down to the Merge. The network is expected to officially switch from Proof of Work to Proof of Stake on September 15. The Merge will not only make the network more energy-efficient; it will also pave the way for it to be faster and cheaper. The Merge is part of Ethereum 2.0, which consists of multiple updates. "The Surge" is meant to make the network more scalable, and the update could enable it to scale from 15 TPS to 100,000 TPS.
Additionally, improving usability and efficiency is planned for the future.
September also a big month for Cardano
Besides Ethereum, the top-7 coin Cardano is also expected to roll out a major update in September. The Vasil upgrade is a hard fork designed to make the network thousands of percent faster. A few weeks ago, a bug was found in a test version of the upgrade that could have jeopardized the launch. Charles Hoskinson (Cardano's founder and a former colleague of Vitalik Buterin) expects the update in September.
