DUBLIN, IRELAND — The cofounder of ethereum believes blockchain technology will be “orders of magnitude more disruptive” than the dotcom boom and bust of the early 2000s.
“This technology is so profound, it’s going to do so many amazing things for economic, social, and political systems worldwide,” Joseph Lubin said. “We’ve really no concern that the ecosystem or the technology is in real danger.”
Speaking at MoneyConf in Dublin on Tuesday, Lubin said: “If you look at the dotcom boom and bust, there were so many of the same issues back then. So much money invested, lots of money lost, lots of failing projects. And what happened was a profound global transformation in how we operate on the planet.
“There was a tremendous amount of creative destruction in the dotcom era that laid the foundation and taught all of us how to build an effective internet, an effective world wide web, and really transform society. I think that we will see dynamics like that in place in the blockchain space.”
Asked if blockchain would be as disruptive the dotcom boom and bust — which saw the Nasdaq crash 70% at its lowest point — Lubin said: “Orders of magnitude more disruptive.
“We try to stay away from the ‘r’ world — revolutionary — and instead use the ‘e’ word [evolution], because we’re doing a tremendous amount of work with corporations and governments to enable them to be more efficient, to enable them to try new business models, to enable them to, effectively, reduce rent-seeking behaviours and build better systems for their consumers.
“We’re also building lots of startups that are directly trying to disrupt. Somewhere between those two approaches, I think we’ll find a happy medium where it does become evolutionary and we all settle on building better systems together.”
Lubin helped to develop the ethereum network in 2014. Ether, the digital currency that powers the network, is today worth over $50 billion and is the second biggest cryptocurrency behind bitcoin.
The ethereum network has been used to launch most “initial coin offerings,” a new form of fundraising activity where startups mint their own cryptocurrencies to raise cash. Over $10 billion has been raised through the method over the past 18 months. However, the sector has been hit by scams and fraudulent projects.
Lubin acknowledged that there are bad actors in the space but said: “That’s just the nature of human activity, unfortunately. For thousands of years, people have been taking advantage of naive consumers with information asymmetries. That is exacerbated in our ecosystem.”
He said the US Securities and Exchange Commission is “absolutely” right to take action against fraudulent projects and said the regulator is actually more permissive of the sector behind closed doors.
“Our perspective on America is probably more positive than what you see in the news,” Lubin said. “I think, very effectively, regulators use those mechanisms to scare people into behaving properly. Journalists love to write those kinds of stories so it’s really magnified.
“We actually see a very progressive, constructive environment in the United States and we see a similar, maybe even more progressive, environment in Europe.”
Lubin said the fraudulent projects don’t threaten the success of the whole blockchain and cryptocurrency industry.
Lubin was speaking during a press conference at MoneyConf to publicise the opening a new office for his company ConsenSys in Dublin.