Worldwide web inventor Tim Berners-Lee said crypto is speculative as its value is based on what people think other people will pay for it in the future rather than hard metrics like revenue.
Berners-Lee made the comment during his appearance on CNBC’s “Beyond the Valley” alongside Inrupt CEO John Bruce.
Berners-Lee likened the crypto industry to the dot-com bubble when people were investing in websites that had wildly bloated market caps due to speculation. He used the example of a company in Texas that created a website to sell cattle online, but its market cap at the time was greater than all the cattle in the world.
He said people were valuing the company based on what they thought it would be worth in the future and likened it to most cryptocurrencies as they are not linked to anything and their value is based on speculation. He said:
“A digital currency that is not linked to anything… where its only speculative… obviously, that’s really dangerous.”
Berners-Lee said that at least the aforementioned website had a revenue, whereas with most cryptocurrencies, the value is based purely on speculation.
He also said that crypto has some utility, with the “most useful” being remittances because one could send family money in another country instantly. However, he added that people should not keep crypto and convert it to fiat immediately after receiving it via remittance.
Berners-Lee said crypto investing is akin to “gambling” and he personally does not want to spend his time investing in speculative assets.
Bruce echoed the sentiment during the podcast and said:
“We have to be really, really, really, careful not to over reach with all this stuff.”
He also said that cryptocurrencies’ relevance in terms of not requiring sovereign control and regulation is “massively overstated.”
The SEC vs. Paxos: A deep dive into the implications of the lawsuit and its effects on stablecoins
The SEC’s notice to Paxos to stop minting BUSD could have longstanding implications on the crypto market. CryptoSlate’s new report explores the recent and potential consequences of enforcement action against Paxos.
