When 24-year-old founder of Ethereum Vitalik Buterin talks, people listen. When he says there’s no longer an opportunity for “another 1,000-times growth in anything in the [blockchain] space,” people (so far) generally seem to disagree.
Buterin professed this belief to Bloomberg over the weekend during the Ethereum Industry Summit conference in Hong Kong. He attributed the potentially looming “ceiling” in the blockchain space to more widespread awareness of the technology. If your average person knows about blockchain and cryptocurrency, then little opportunity remains for people to get newly excited about the technology and (literally) buy into it. Meanwhile, cryptocurrencies previously relied on marketing, according to Buterin, to drum up interest and therefore prices. Once that marketing’s done its job, then what?
The foundation for Buterin’s idea—that most “average, educated” people know about blockchain—may not be that strong. In a recent survey BREAKER looked at by YouGov last week, only 13 percent of US respondents had heard about Ethereum, the second best known cryptocurrency mentioned in the survey (bitcoin took spot one, with 71 percent asserting awareness). However, that survey only included 1,202 people, which makes it difficult to extrapolate about the entire country’s knowledge of cryptocurrencies.
Don’t worry, there are other surveys out there. “Attitudinal” data firm Dalia Research surveyed 29,492 internet-connected people in eight different countries back in March and found that anywhere between 87 percent (South Korea) and 61 percent (Brazil) were at least aware of cryptocurrencies. But if you divide that number up between the different countries, you’re left with sample sizes not much more impressive than YouGov’s. Another 2,000-respondent survey cited by CNBC in March put the percentage of US adults who’ve actually purchased cryptocurrency at eight. This leaves room for plenty more to buy in, making Buterin’s “ceiling” seem potentially further off—but it also leave room for a lot more US adults to participate in these types of surveys.
If you’ve been watching the crypto-market, it’s easy enough to get on board with Buterin’s claims. The price of most coins are down and have been on that trend-line for some time. (Exceptions include Tether, which has been experiencing a bumpy ride up in terms of market cap, and Dogecoin, whose price has been rising since the Dogethereum bridge demo on September 5).
Regardless of what Buterin says about the blockchain space, him saying anything at all is likely to affect it. That’s always a concern in the cryptocurrency space, where, for example, Litecoin creator Charlie Lee sold and donated his entire Litecoin holdings in December 2017 because people believed his tweets were purposefully influencing its price. If Buterin says now that there’s a “ceiling in sight,” people might just start looking up at it.
Naturally, crypto Twitter had something to say about Buterin’s remarks. Many people don’t believe that blockchain awareness is quite where Buterin says it is, leaving plenty of space for the ceiling. Even if numerous people are aware of various coins, it also doesn’t mean that they’re actually using them—an observation in line with the already-mentioned surveys. Others have simply badmouthed Ethereum and Buterin, saying the latter is “just upset with his declines.” Then again, Buterin suggesting a crypto-ceiling isn’t the best way to get more people to put money in Ethereum.
The next move for people who own coins or know about them is to start using them, Buterin told Bloomberg. Instead of considering cryptocurrency as an “investment,” a store for potential wealth, we actually have to start treating it like a currency, generating “real economic activity,” he says. The hype surrounding cryptocurrencies outpaces their use cases, and that’s a problem when it comes to any coin having real value. The biggest reason for today’s chilly crypto forecast: Not enough people are using this stuff yet.