Vitalik Buterin: The number of cryptocurrency fraud is growing, and the importance of mining is going down

Vitalik Buterin: The number of cryptocurrency fraud is growing, and the importance of mining is going down

Vitalik Buterin, the founder of Ethereum, gave the Kommersant publication an interview on cryptocurrency fraud and the prospects of mining.

He named three main fraud types in today's crypto community. First, it’s the use of someone else’s data for personal gain.

"This kind of fraud will live for a very long time, including at the cryptocurrency market," said Buterin, "It is indestructible."

Secondly, fraud with smart contracts, it’s when companies that develop smart contracts deliberately make a mistake in the code and withdraw pledged funds from the contract. And thirdly, fake ICO, the so-called ICO scam.

At the same time, he noted that the Ethereum Foundation is not yet working on the crypto community security developments, but there are initiative groups that are already gathering and working on this problem.

"These developments have every opportunity to grow into a full-fledged business, but the niche is more likely to be occupied by cyber security companies. Sooner or later, the cryptocurrency market will expand to such an extent that they will pay attention to the constantly growing security products demand. With the ecosystem expanding, such companies will definitely come to this market," Buterin assured.

As for mining, at the moment it is a powerful, profitable business, Buterin explained. Today, professional companies with high capacities and high-quality equipment are often engaged in it. But in the future, importance of mining will decrease.

"If we look at the long-term perspective, mining as a phenomenon can simply disappear. Very soon there will be a transition to the Proof-of-Stake protocol developed by Ethereum, and at the very beginning of this transition, the need to mine will simply disappear. The work of decentralized networks will not require large capacities for calculations, the algorithm will use coins directly inside the platform, which will significantly reduce the process cost and actually deprive miners of all income," Vitalik Buterin said.


Discover more at Blockchain & Bitcoin Conference Kiev!

Buy a ticket
Meet new speakers and key news of the conference