Ethereum (ETH) co-founder Vitalik Buterin says that high ether prices are important both for network security and the wider ecosystem’s development. Buterin made his remarks during an interview for Laura Shin’s crypto-focused “Unchained,” hosted at the Columbia Graduate School of Journalism and live-streamed on March 20.
In response to Shin’s question as to whether protocol designers and project leaders should be focusing on the question of a cryptocurrency’s price, Buterin referred to the “earlier rhetoric” of the Ethereum project, which had explicitly downplayed the importance of the asset’s value:
“In part, it was counter-signaling to distinguish ourselves [Ethereum] from other crypto projects that do pumping and lambo-ing way too much. But it was also about minimizing legal risk by basically trying to make the project seem more distant from something that would be covered by financial regulation.”
In today’s context, he continued, regulators are more conversant with the cryptocurrency space and blockchain projects, and therefore “even if people try to claim the price doesn’t matter at all, they [the regulators] are totally going to see through that.” In regard to his own views, Buterin made two cases for strong asset value, arguing:
“I can tell you what things are clearly important about why the price being higher rather than lower is good. One of them is obviously security. If the price is zero, then the network can’t be secure. That’s true in proof-of-work and proof-of-stake.”
His second argument hinged on the fact that the creators and participants in projects within a given crypto ecosystem tend to have a stake in the token, and therefore as holders, they are prospectively better-funded to develop their work if an asset’s value remains high.
Following Buterin’s remarks, the audience was asked to give live answers to the question, “Are Ethereum developers focused enough on the price of Ethereum?” Their responses settled at roughly 38 percent claiming they “don’t care,” 23 percent they “don’t know,” 21 percent a firm “Yes,” and 19 percent “No.”
Notwithstanding this alleged apathy on the part of the majority of attendees, Buterin did respond to the question of developers’ role by stating that they have a responsibility to refrain from doing “stupid things that would lead to the price going to zero,” as for example, by flooding the market with a deluge of newly minted coins.
In a recent speech at Token 2049 in Hong Kong, Buterin argued that blockchain applications outside of finance face more difficulty gaining traction, noting that finance is “realistically the first blockchain [application] that will probably achieve wide scale adoption.”
