Tim Draper Says Ethereum’s Issuance Rate of 2%-4% ETH Worries Him
By CCN: Billionaire venture capitalist Tim Draper is one of the biggest advocates of the cryptocurrency space. He is famous for his bullish $250,000 bitcoin price prediction, which would reflect a 5% market share around the world in the coming years.
Draper supports competition in the space and in addition to bitcoin is also a fan of smart contract technology, other blockchains including Ethereum, artificial intelligence, and big data. But something he reportedly takes an issue with is Ethereum economics, particularly the issuance of between 2% and 4% of ETH supply each year. In an interview with Ethereum Classic Labs, Tim Draper stated:
“That worries me because it’s all under – [Vitalik] Buterin has the whole – he can just arbitrarily say, ‘hey we’re just going to print 10% of this s**t.’ … He may not but whoever follows him might. That’s the part I don’t like, the concentration there. The whole point is to be decentralized. You want a fixed number.”
Ethereum’s moving to a proof-of-stake consensus algorithm, which can result in a lower issuance rate.
Tim Draper Is a Fan of Ethereum Smart Contracts
On the other hand, Draper is impressed with what Ethereum has been able to do with smart contracts. He said:
“That currency has had a lead in how smart contracts are built…Although I’m seeing a lot of smart contracts built around Bitcoin, I know that the early pioneering work was done around Ethereum.”
Draper looks forward to a world in which there are fewer disputes as a result of smart contract software. He points to sectors such as banking, finance, and commerce, all of which have already been disrupted by the blockchain and smart contract technology. Next on the list are industries such as real estate, healthcare, and insurance, all of which will become transformed. He points to a world in which the health care will be fueled by AI and the data will do a better job a diagnosing a disease than any amount of questions any doctor could ask.
The interview wouldn’t have been complete without some discussion about bitcoin. Tim Draper says:
“I think people are going to start thinking ‘maybe we’re looking at it’s cheapest. People say, ‘Oh I wish I’d gotten in before.’ I think that’s wrong-headed. They’re going to look back and say either I did or I could have gotten in on that ground floor when it was $8K.”
He advises investors to expect volatility and the banks trying to “manipulate it down to nothing because they’re threatened.” But in the end, as they move through the normal stages of grieving, eventually they will come to acceptance and want to have a coin of their own, kind of like JPMorgan and its JPM Coin.
About The Author
Gerelyn is Assistant Editor at CCN. Before crypto, she was covering institutional investing on Wall Street but caught the bitcoin bug soon after. She resides 13 miles outside of New York, close enough but also far enough away to escape it all. Follower her on Twitter (@cryptogerelyn) or email [email protected] Disclosure, she “hodls” bitcoin.
This article was edited by Gerelyn Terzo.