Emin Gün Sirer, creator of the Avalanche Consensus protocol and CEO of Ava Labs, believes that there is a very simple method to detect a long-lived cryptocurrency project.
On February 7, Sirer discussed blockchain venture capital and cryptocurrency regulation in a chat with MarketAcross COO Itai Elizur at the Building Blocks 23 event, focused on Web3 builders.
During the discussion, The Avalanche founder pointed to the crucial role of “staying power” in the cryptocurrency industry, condemning players who rush from project to project or jump on “every new coin offering” in the hope that they will rise. According to Sirer, the desire to make quick profits from cryptocurrencies will only turn the industry into something terrible, and VCs are not to blame.
“I’ll tell you who’s to blame: it’s us”, declared Sirer, urging the community to support crypto-sound initiatives and avoid fraudulent projects with a short lifespan. Next, he shared his “very simple test” of how to spot long-running cryptocurrency projects and steer clear of those that make big promises and then disappear.
“So look at the team behind any project, look at their staying power”said the CEO of Ava Labs, adding that a cryptocurrency firm’s regulatory jurisdiction provides one of the most important clues to its long-term capabilities. He stated:
“If a project is based outside of the United States, you know it’s some kind of Cayman Bahamas, etc., some kind of tax haven, or Austin, Texas, etc., they’re there to sell points and disappear. They have no staying power.”
Silicon Valley-based cryptocurrency companies are probably in the “pure tech game,” Sirer argued. “They’ll do the one technological trick and then disappear,” he noted.
The Ava Labs CEO added that durable crypto projects are more likely to be based in New York, “where the assets are,” and integrated with financial institutions. “That is where we need to go,” Sirer declared, stressing that there are some people who dedicate their lives and careers to making things work in the crypto sector.. “VCs, of course, love short-lived projects,” he added.
Besides, Sirer stressed the importance of always growing the space, even during a bear market.. “In fact, I like bear markets better. It’s a lot more fun to build when everyone is more rational,” the executive said.
Sirer’s latest statements add some new insights into the executive’s vision of the cryptocurrency market. In 2020, Sirer argued that more than 95% of cryptocurrencies were nothing more than scams. He also criticized the use cases of new crypto initiatives, stating that Bitcoin was the first cryptocurrency to offer a peer-to-peer online payment method.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.