Cryptocurrency prices have been especially volatile in recent weeks, with currencies like Ethereum dropping significantly.
Bitcoin has remained relatively resilient, but has also seen a big overall decrease in price this year.
Some speculators argue that these price movements are due to the regulatory problems surrounding the trading of Bitcoin and recent actions by governments to crack down on the transfer of cryptocurrencies.
Other state that most cryptocurrencies are simply not worth their current price and will continue to drop until they see wider adoption from businesses and consumers.
Since the beginning of 2018, Bitcoin has lost more than 50% of its market cap.
Bitcoin has remained on a steady downward trend throughout the second half of the year, and most other cryptocurrencies have followed its lead into a decline.
To find out what a blockchain expert thinks about these cryptocurrency price movement, MyBroadband spoke to Status technical evangelist Andy Tudhope.
Tudhope is a member of the team building Status, a decentralised messaging platform developed on top of the Ethereum blockchain.
When asked about the pricing of cryptocurrencies, Tudhope said he doesn’t like to speculate on price movements.
“It’s very difficult to say, and I don’t like giving price predictions because – more often than not – I tend to be wrong,” Tudhope said.
Most traders seemed to expect the price to continue falling, however,
“It seems that most people more experienced with trading feel that the current downward trends are likely to continue in the short to mid-term, but that we should see it bounce back later next year, as all the work now underway really comes to fruition.”
These price changes affect the development interest around Ethereum and Bitcoin, but not as much as some would expect, he added.
“In my own experience, the people who tend to spend their time actually building the technology do not pay too much attention to the price fluctuations, as their motivations have more to do with thinking and working in a different and decentralised paradigm, rather than getting rich quickly,” Tudhope said.
“It does mean that new developers have less of an incentive to contribute their time and skill, though we must remember that even at $100/ETH, for instance this still represents a fairly significant financial incentive, especially for the open source software community at large.”
Much of the development occurring with the blockchain space is ideologically-driven, meaning the industry has some resiliency to rapid fluctuations and work will continue despite falling prices.
“The price certainly affects speculative interest, which is the funding engine in many ways for development but, because a lot of the development is primarily ideologically driven, having slightly less funding doesn’t seem to have stopped anyone so far,” Tudhope said.
“In fact, it often serves as an opportunity to stop caring overmuch about managing money and get back to focusing on building tools that real people will actually use and benefit from.”
Tudhope argued that the recent price decrease could even filter out those developers who aren’t invested in the potential of the technology.
“It also means that the people who do start developing on these networks when the prices are headed down tend to be a better fit for the long run – they bring with them very different ideas of what constitutes value and wealth, and how those things ought to be described and distributed in the world,” he said.