Internet expert Tim O’Reilly: Cryptocurrencies and NFTs are “pretty serious speculative bubbles”

Tim O’Reilly, internet expert and inventor of the term Web 2.0, doesn’t seem to be a big fan of Web 3.

Tim O’Reilly – Founder of O’Reilly Media

On Wednesday (February 9), O’Reilly appeared on CBS Moneywatch and discussion about cryptocurrencies, blockchain and the rise of Web 3, the term for the next wave of the internet built on decentralized blockchain networks and platform-specific tokens.

To emphasize the general theme of the interview, O’Reilly was asked about Web 3 and its possible future. He answered:

“The Metaverse itself was full of bubble hype. They sell a lot of Meta Quest2 (VR headsets, formerly known as Oculus) but the technology is far from available.”

And while O’Reilly acknowledges that the crypto and NFT space is booming, he believes its growth may not be sustainable.

“I think it’s actually a pretty serious bubble on a very small platform.”

The NFT market in particular has exploded in the last year. According to data from DappRadar, NFTs — tokens that represent ownership of digital assets — will have generated more than $25 billion in revenue by 2021. That has led to companies like OpenSea, the most popular marketplace for buying and selling NFTs, raising millions of dollars from investors.

OpenSea reached a valuation of $13.3 billion last month after raising $300 million in a Series C funding round, and also posted a month of $5 billion in trading volume. However, OpenSea only has a total of 600,000 users, O’Reilly claims, which matches the monthly numbers tracked by Dune Analytics.

“We won’t know what Web 3 is until the current bubble collapses — because we’re in the middle of a bubble, like the dot-com bubble, where all kinds of crazy startups are overvalued.”

While O’Reilly said the market built around Web 3 should be “ready to crash,” he also expressed some optimism about what he thinks will happen afterward.

“Once those bubble ratings are in place, it attracts a lot of capital and talent, and people can start to really build on that.”

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