For the creator of web 2.0 cryptocurrencies and NFTs are speculative bubbles

For the creator of web 2.0 cryptocurrencies and NFTs are speculative bubbles

Tim O’Reilly, the internet guru and the man who coined the term Web 2.0, doesn’t seem like a big fan of Web3. O’Reilly appeared on CBS Moneywatch and discussed crypto, blockchain and the rise of Web3, the term for the next wave of the Internet built on decentralized blockchain networks and platform-specific tokens.
Underlining the general theme of the interview, O’Reilly was asked about Web3 and what the future might hold. “The metaverse itself is full of bubble hype,” he replied. According to him, for example, the Meta Quest2 (the VR headset formerly called Oculus), is selling a lot, but the technology is still rough.
And while O’Reilly acknowledges that the cryptocurrency and NFT space is booming, he believes its growth may be unsustainable: “I think it’s really a pretty serious speculative bubble on a very small basis,” he said. The NFT market, in particular, has exploded in the last year. In 2021, NFTs – tokens representing ownership of digital assets – generated more than $ 25 billion in sales, according to data from DappRadar. The previous year, NFTs accounted for less than $ 100 million in sales. This has led to companies like OpenSea, the most popular market for buying and selling NFTs, raising millions of dollars from investors.

OpenSea last month achieved a valuation of $ 13.3 billion following a $ 300 million funding round. It also had its best month in terms of trading volume, surpassing $ 5 billion in sales. Yet the exchange has only 600,000 total users, says O’Reilly, a value that corresponds to the monthly data monitored by Dune Analytics.
OpenSea hits record $ 5 billion in monthly sales as Ethereum’s NFT market swells. “We won’t know what Web3 is until the current bubble bursts, because we’re in the middle of a bubble, ” O’Reilly told CBS Moneywatch. While the tech guru said the market built around Web3 should “prepare for collapse,” he also offered some optimism for what he thinks comes next: “Once you get those bubble valuations, it will attract a lot of capital and talents, and people can really start building something on it ”.

by Alessandro Crea
Tuesday 15 February 2022 17:00