However, Tavel still believes cryptocurrencies will be a big deal going forward.

As the resident cryptocurrency believer at venture capital firm Benchmark, Sarah Tavel says digital coins like bitcoin are “not the internet, yet” — in other words, they’ll be a big deal, eventually.

Just like the internet, though, there may be some false prophets en route to their acceptance. On the latest episode of Recode Decode, Tavel told Recode’s Kara Swisher and Teddy Schleifer that there’s a big difference between some cryptocurrencies, such as bitcoin and ethereum, and the tidal wave of Initial Coin Offerings that began flooding the ecosystem late last year.

“A lot of these projects are going to collapse,” she said. “A lot of them have been complete scams.”

“I don’t believe in the structure of ICOs,” Tavel added. “I don’t believe in a couple of engineers writing a white paper, trying to anticipate the inflation rate they want to have, all the incentives. It just seems like we’ve gone back to the ’80s, when you had waterfall development. Really, to build these types of networks, you want to have a very iterative process.”

You can listen to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

On the new podcast, Tavel acknowledged that there was more money invested across various ICOs in 2017 than was invested in traditional venture capital seed rounds. But she predicted that that won’t last, which means her job as a startup investor isn’t put at risk by the decentralized nature of the crypto craze.

“I don’t believe that the ICO structure as it is right now is going to continue,” Tavel said. “I think there was a lot of FOMO driving it. It’s very clearly a bubble to me, what’s happening with the ICOs.”

“You’ve got all these people who made a lot of money in bitcoin, and later ethereum, who are rolling it into these ICOs,” she added. “They think they have the Midas touch. Everybody looks smart in a bull market, so there are a lot of people who think they’re really smart right now.”

If you like this show, you should also sample our other podcasts:

  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
  • Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
  • And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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Recode – All Go to Source
Author:

Eric Johnson

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