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Cryptocurrency Cautions Issued By Coin Co-Founder

FILE: Illustration shows representation of cryptocurrency Bitcoin, Ethereum and Dash plunging into water. Photo taken May 23, 2022

Cryptocurrency "Ethereum" co-founder Gavin Wood said on the sidelines of this week's Davos economic summit that crypto investors need to be more aware of what is backing their holdings after a market rout which wiped more than $800 billion off their value.

Cryptocurrency and blockchain firms are highly visible at the Davos Economic Summit despite the market plummeting in value in the weeks leading up to the event, with the eighth-largest coin Luna becoming virtually worthless.

The co-founder of one such cryptocurrency, Ethereum's Gavin Wood, says those who invest and speculate in these non-national and asset-backed assets should keep a sobering point in mind.

"I would hope that people pay more attention to what is belying the currency name when they get involved in a community, ecosystem, economy," Wood told Reuters.

British computer scientist Wood was attending for the first time to talk about a new partnership between his blockchain project "Polkadot" with American billionaire Frank McCourt's "Project Liberty."

Blockchains are public ledgers that keep records of transactions on networks of computers, and, along with cryptocurrencies, are largely unregulated.

"The internet has no real concept of legality, because legality is something that is determined by sovereign nations," Wood said in an interview.

The cryptocurrency craze has come to Africa. One nation, Central African Republic, has established crypto as a state holder of value, and has announced plans to open a cryptocurrency exchange.

On May 26, the benchmark cryptocurrency Bitcoin was struggling to hold at the $30,000 mark - much of the trading has been below that line. It was as high as $46,000 just months ago, wiping huge sums from investors' portfolios.