Bitcoin Cash Proponent Dr. Craig Wright Says ERC-20 Tokens Are “Dead End”
Cryptovest
Published Jul 17, 2018 10:36AM ET
Bitcoin Cash Proponent Dr. Craig Wright Says ERC-20 Tokens Are “Dead End”
In a controversial statement, Dr. Craig Wright, known for supporting Bitcoin Cash, stated he believed the idea of ERC-20 tokens is a “dead end”, and those assets have no future. In a recent tweet, Dr. Wright shared his polarizing opinion:
https://twitter.com/ProfFaustus/status/1019120434112016385
The statement was part of Dr. Wright’s support for developments in Bitcoin Cash (BCH). Right now, the Bitcoin Cash project is working on the Wormhole protocol, to support smart contracts.
In theory, almost all networks can support smart contracts and possibly tokens, even Bitcoin with its Omni layer, which is famous for the Tether (USDT) tokens. However, Ethereum -based tokens are quickly becoming the industry standard, for their ease of generation. Because owning ETH is relatively easy, moving those tokens is also readily available.
Dr. Wright, however, believes the technology may be displaced soon, despite its widespread presence. The statement is a part of the enmity between Dr. Wright and the co-founder of Ethereum, Vitalik Buterin. In the past, Buterin has called Dr. Wright “a fraud” .
For many projects, tokenization is a way to quickly build a new economic model of rewards, or transactions. Other projects use the ERC-20 standard as a preliminary stage, later moving to another blockchain with different rules.
Still some projects plan to remain on the Ethereum network, including Kin (KIN) project will keep the ERC-20 token, but also offer a way to swap it for a faster digital asset, which would be used within the Kik chat app. So far, almost no app has found a way to directly use ERC-20 tokens, which require ETH holdings to pay for gas every time the tokens are moved.
The other problem with ERC-20 tokens is their status as potential securities. The technology itself has nothing that defines the token as a security, but there are smart contracts distributing dividend-like rewards.
https://twitter.com/BryceWeiner/status/1018999003986452480
Recently, Coinbase announced the potential addition of several new assets, including Basic Attention (BAT), also an ERC-20 token. The exchange service added support for the token standard, without promising to list any of those assets.
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