Conversation with Norbert Goffa – Co-Founder of ILCOIN – About the Cryptocurrency Market, Trends and Vision
An interview by Alyona Karpinskaya
Interviewing: Norbert Goffa
Q: Currently, everybody is talking about the skyrocketing price of Bitcoin. Did you expect that Bitcoin would reach its all-time high by the end of 2020?
A: Frankly, I did not. I expected it to strengthen more by the end of the year, but nobody figured that it would happen at this pace. We analyze the forecasts a lot about the possible change in Bitcoin’s price with our team, but this pace was really surprising. For my part, I refrain from forecasts and I do not regard as realistic the theories which are forecasting a hundred thousand dollar prognosis within a relatively short time interval. I figure that the point is not in predicting exact prices, but rather in forecasting tendencies. I think that excessively rapid growth also has its disadvantages, just look at the present market.
Since everything is defined by Bitcoin, it is necessary to review the negative effects which are caused by steep price increases. Of course, who wouldn’t be happy to have their Bitcoin be worth more and more? Naturally, it is in everybody’s interest, but, at the same time, other effects should be paid attention to, since Bitcoin has an unmitigated dominancy on the cryptocurrency market, and because of this – a strong Bitcoin may not serve the other participants of the market. The ones who are surely very pleased are the miners, since their charges change for the better with this price.
Q: You referred to altcoins in the previous question. Could you elaborate on that a bit more to explain how you see market trends?
A: Whenever Bitcoin strengthens, all the altcoins, which cannot keep up the pace, weaken compared to Bitcoin. Whenever Bitcoin weakens, the altcoins typically lose a lot more from their value, since they are already behind compared to Bitcoin. As a specific example, if we take a look at the all-time high price of Ripple or Ethereum, then we see that they are very far from the prices they had previously reached. Bitcoin, however, already exceeded that price, so we can state that everybody suffered a grievous defeat against Bitcoin.
Of course, this does not mean that an altcoin – the new ones in particular, which are mainly DeFi projects – cannot make a bigger profit than Bitcoin. In my example, I was referring to the veterans, which happened to enter public awareness as alternatives to Bitcoin. I could have laughed at these visions years ago. Bitcoin not only cannot be overturned, but it is almost impossible to get even close to it. I deem this as a good thing and an advantage in the long run, since it is unnecessary to find alternatives for the same purpose that we use Bitcoin. It is more important that a project presents such solutions in which Bitcoin cannot be counted on. From this point of view, Ethereum is a paragon, since it provides such a solution that Bitcoin is not capable of. Personally, I think that contending with Ethereum is more of a challenge for the altcoins than competing with Bitcoin. Because it is like challenging dolphins in a swimming contest in the ocean.
Q: You mentioned Ethereum as the paragon of the cryptocurrency market. What do you think, how will Ethereum 2.0 affect its price?
A: If I could answer simply, I would say that it is not a very influencing fact that Ethereum is creating such a smart contract network with which the investors’ Ether is getting staked. I do not want to predict anything, but staking is somewhere around the inflation level. This is something like bank interest, but still, it is not the same. My opinion is that in the long run, Ethereum’s strategy is not that good, since these solutions are also making Ethereum less worthy. Of course, this is not clearly black or white. There could be a price-increasing effect from Ethereum 2.0, but I see a market that works differently, where we cannot say that an upgrade like this will make such and such profit for investors. There are so many unpredictable factors, so these forecasts do not have any significance besides marketing value.
Let us say that tomorrow Bitcoin will fall back to 20k. Is it good or bad? Naturally for those who purchased in the past few days it is very bad. On the contrary, for those who have been consciously building their Bitcoin portfolio for years, it is certainly good, since a good trader earns their money on movements and not only on continuously rising prices. This is exactly why DeFi projects are popular, since one could make a lot of money with them. Let us just check the recent time range of Year.Finance.
Q: You referred to DeFi projects as easy profit-making possibilities. What is your opinion regarding how long the buzz around DeFi will continue and what will be the end of it?
A: Right now, attention has been lowered on DeFi projects and everybody is watching Bitcoin. I’d like to add that it is rightly so. What happened with Bitcoin is way over the expectations of 2020. And that is answering your question regarding that DeFi will continue on the road it has taken. DeFi has a future, since DeFi stands for the decentralization of the cryptocurrency market. You would think that a centralized exchange has a lot of advantages, since it secures the money of its clients. Yes, and it is also the case of an exchange that won’t pay out the client’s money. Sadly, we have had quite a lot of experience with such cases. Exchanges can disappear with the users’ money! Of course, you could say that you have to use exchanges with a good reputation. Naturally, it is a way, but the question is the price. I’d bet that the success of freshly arriving tokens lies in the fact that at the moment of launch, one or two TOP exchanges are already backing the project. If I may conspire a little, then I would say that the exchanges are also owners in these projects. If a token is on one of the TOP exchanges, then that is already half of the success. I would also like to ask – how decentralized is the cryptocurrency market really?
Q: Thinking over what you just said, we can assume that it is easier and more cost effective to create an ERC20 project than building a coin on own technical innovations. Is this what you wanted to point out earlier?
A: Yes, that is exactly what I wanted to refer to. You understand it. Of course, you can argue about it, but it is not worth it. The cryptocurrency market prefers the token-based approach regarding trading, rather than the individual coin-based approach. I do not mean that it is a wrong approach, since from a speculative point of view, one token could be enough for success. If I generate 1 million tokens, which is the maximum of my project’s supply, then I could easily give 250,000 to an exchange in order to make it launch the project. This is what I was referring to in the previous question.
This does not mean that your own coin, which is based on a unique technology, would not be valuable or would not be more valuable than those of token-based projects, whose purpose limits to speculative trading. Both approaches have advantages and disadvantages. This is why I think that stock market trading might be more effective than token based, but it is not enough by far in case of real terms. This is why I think that in the long run, a unique technology will be more rewarding.
Q: Let’s talk a little about ILCOIN. You created the RIFT Protocol about a year ago. What happened since then in the ILCOIN Blockchain Project?
A: We transformed in several respects. Although we won the race for block size increases, I could say that we were the only ones who crossed the finish line. Even we ourselves did not expect this. This is not good, definitely not good, since if you are the only participant in a race, then it is not a race anymore. In one word, all of the attention has been drawn from the block size increase and the on-chain based data storing, and directed to DeFi projects. I admit that we did not anticipate this, but I guess that we are not alone with this problem. We have to see where we outperformed and what caused the contest to lapse. Why would you come out with a 2GB block, if there were someone who made a 5GB block. At the most, you can grant free promotion for the winner. At the same time, I think the day will come when the RIFT Protocol will be commonplace.
Then, add COVID19 to all of this, which also balked our plans. You can say that 2020 was not our year for sure. At the same time, a lot of good things happened, and these advancements will have their market effects in 2021. It is enough to mention our VR game, since we have serious plans for it in the future, since Age of ILCOIN: Retribution shall be the most important element of the DCB. Besides this, we have plans regarding that ILCOIN should be a part of DeFi projects, because we believe in the benefits of the expansion of Decentralized Exchanges. All in all, there is a lot happening in the background, and I’m sure it will bear results.
Q: If I understand it correctly, you wish to say that it is expected that the price of ILCOIN will rise during next year? If we take a look at this year, your price has fallen greatly. Is there any special reason for that or is it just the way the market went for you?
A: That is a difficult question, and I had hoped that you wouldn’t ask it. But, obviously, this question is what’s on everyone’s minds. I guess there is no project that likes talking about decreasing prices. I would like to add that we are not alone, since we are proportionally in a better position than some of the top altcoins. But, I would not like to hide behind others, so it is a fact that we too lost a great deal this year. At the same time, I do not see this as such a great problem. All cryptocurrencies went through the same process. Bitcoin needed two years to find the way back to its former self, and it even exceeded that. The fact that we lost a lot from our price does not mean that there is no potential in us. I think that this is exactly why we have a good chance of rising in the future. Of course, we need new business partners and reforming is also necessary. We are working on that and I’m happy to say that our prospects are very favorable.
It is natural to ask the question as to why our price decreased. There are several reasons behind that, of which I would not like to speak, since it is very speculative. It is for sure that we generated more enemies than friends with the 5GB block. We terminated our cooperation with some of our partners and, of course, the interaction with the exchanges was not always a joyride. We learned a lot from these cases and this is why I was talking about reforming. ILCOIN is a project with great potential, since we have such a development team behind us that has already proven itself. I am sure that we will emerge victorious from the blockchain technology contest in the long-run. I do not promise anything that is not down-to-earth. I never made any factual statements about the price of Bitcoin. And that is not a coincidence, I leave presumptions for others. I’m interested in trends and tendencies. This is how I look at ICOIN. I do not mean any particular moment, because you cannot make long term conclusions from it. I believe in trends, tendencies and innovation. This is why I represent ILCOIN.
For more information about ILCoin, please visit: https://www.ILCoincrypto.com/
About Alyona Karpinskaya:
Founder of the PR-Blockchain agency, technical writer, journalist and publicist.