Ethereum co-founder Gavin Wood has advised cryptocurrency investors to be more aware of what is backing their holdings after the crypto market wiped out more than $800 billion from their value.
Wood told Reuters on the sidelines of the World Economic Forum (WEF) at the Swiss alpine resort of Davos, “I hope people pay more attention to what currency names when they are involved in a community, an ecosystem, an economy.” But what is the focus?” ,
cryptocurrency There has been a sell-off in riskier assets this year, which has picked up steam as data shows US inflation is heating up, with investors deepening fears about the economic impact of aggressive central bank tightening. The downturn in the crypto market that began in April has wiped out billions of dollars in market capitalization within a month.
Crypto and blockchain firms have been highly visible at the gathering of business and political leaders this year, leaving Luna, the eighth-largest coin, virtually worthless, despite a drop in market cap in the weeks prior to the event.
Blockchains are public ledgers that keep records of transactions over a network of computers and, as with cryptocurrencies, are largely unregulated.
“There is no real concept of legitimacy in the Internet, because legitimacy is something that is determined by sovereign nations,” Wood said in an interview to Reuters. “Technology can’t stop people from making mistakes, but it can help people who want to better understand the facts of the world about what they’re buying,” Wood said.
The 42-year-old, who also coined the term Web3, also founded the Web3 Foundation, which supports the restructuring of the Web for individual users from large companies such as Google’s owner Alphabet.
The cryptocurrency has seen a sharp decline in recent weeks. After a 17% drop in April, bitcoin has lost more than 20% of its value so far in May, highlighting the risks facing holders of the highly volatile asset.