Speaking at the Devconnect event, Etheruem (ETH) founder Vitalik Buterin warned that institutional funding could undermine Ethereum’s value.
At this point, Buterin warned that large-scale holdings of Ethereum by large institutional investors like BlackRock could negatively impact the direction of the network.
Buterin emphasized that as the share of institutions increases, concerns arise about alienation from the community and the deterioration of the technical side.
“Concerns are growing that Ethereum could be heading in the wrong direction if the institutional share grows too large.
The rapid increase in ETH held by institutions, especially after BlackRock launched its Ethereum ETF, is emerging as a problem.
Buterin’s concerns center around two key risks: First, the core decentralized community and developers could drift away. Buterin suggested that if Ethereum becomes a vehicle solely for institutional investors, the developers who built its infrastructure could leave.
Second, technical decisions can be guided by institutional needs. Buterin cited the reduction of block generation time to 150 milliseconds (ms), saying, “Such a change would make it difficult for ordinary users to run nodes, and nodes could only be operated by institutions like New York-based financial centers.” This could lead to the network becoming more institutionally oriented.
“Ethereum’s fundamental structure is accessible to everyone in the world and must be protected against censorship. These fundamental values must take precedence over the speed and convenience that institutions desire,” Buterin added.
Etheruem founder Vitalik Buterin also warned that quantum computing could break Elliptic Curve Cryptography (ECC), the foundation of Ethereum’s security, before the 2028 US presidential election.
*This is not investment advice.