What Vitalik Buterin Says About Initial Coin Offerings

Ethereum creator Vitalik Buterin caused quite a stir when he entered the hip Tel Aviv bar this Thursday. The open room overflowed with more than a hundred cryptocurrency fans and curious friends. Most were Israeli men from the local tech industry, from bald polo-shirt-wearing programmers to hacktivists with dreadlocks. There was even a rogue teenager, allowed in with his dad because the underage bitcoin trader idolizes Buterin. Photographers flocked whenever Buterin left the stage to grab water. 

“You know who he is?” A traveling startup consultant from California whispered beside the bar, where the air conditioning almost masked the summer night’s sweltering Mediterranean humidity. “That’s the guy who invented OmiseGo coins.” Her mistake was understandable. As a supportive advisor of the Asian blockchain startup OmiseGo, Buterin wore the company’s blue and white logo t-shirt. At least in the tech industry, Buterin’s celebrity status has officially surpassed that of the blockchain network he invented. Many came to hear him speak without knowing what cryptocurrency actually is.

However, once Buterin invited the rowdy audience to ask him questions, it quickly became clear there were also many veteran Ethereum users at this Tel Aviv bitcoin meetup. In between teasing pleas for the crowd to settle down, Buterin explained his take on some of cryptocurrencies hottest topics: Initial coin offerings and the political future of cryptocurrency.

“Are they [tokens] going to replace fiat? I believe no,” Buterin said. There are plenty of reasons a government would want to keep traditional money, like dollars as euros, even if the nation also adopts cryptocurrency. Buterin pointed out the dangers of dramatic price oscillation, the type we’ve seen with bitcoin as it continues to grow. If this happened to a national currency, like the Israeli shekel, Buterin argued even temporary drops could spark local market crashes or a recession.

Regardless, he said he still believes several countries will soon try making their own digital currencies. Buterin himself met with Russian president Vladimir Putin and Central Bank of Thailand this summer to discuss such possibilities. Traditional banks from India to Switzerland are already working with cryptocurrency.

Cryptocurrency won’t just disrupt centralized systems with government surveillance; It will also become a part of them. “I personally think we are going to see some of both,” Buterin responded to one woman’s question about capitalism versus the blockchain community’s cypherpunk philosophy. “It [crypto] will deeply modify the ways we interact with each other.”

Many cryptocurrency users want blockchain technology to free people from the current financial power structures, including economic government control. Not all are anarchists, some merely prefer the idea of democratizing money. Anyone can mine ether tokens, then spend them without a bank account or institutional approval. Average people can even make their own currencies, with the right technical skills. Now that lawmakers and banks are joining the cryptocurrency boom, some veterans fear institutional blockchain networks will suffocate decentralized volunteer projects. So Buterin offered idealists a spoonful of hope.

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