Bitcoin (BTC) is considered to have many potentials, including providing freedom, protecting against inflation, and being a world reserve currency. But Charles Hoskinson, Cardano (ADA) founder and CEO of IOHK, thinks that some weaknesses are preventing the crypto king from reaching the final feature.
In a recent interview with YouTube channel Crypto Jebb, Charles talked about “dystopian systems of government, blockchain solutions for the ancients, and leadership principles for succeeding in crypto.” He questioned Bitcoin’s ability to become a world reserve currency, saying that Bitcoin’s increased energy consumption is fueling centralization.
Bitcoin’s proof-of-work (PoW) algorithm consumes much more power than a proof-of-stake (PoS) network. Some researchers believe that the energy requirement of PoS is 99.99 percent lower than PoW. Such reasons are the reason why Ethereum wants to switch to PoS, in addition to its worldwide goals of reducing energy consumption and being green. Although Bitcoin mining is said to have become more environmentally friendly lately, the issue of power is still a concern for many.
Nor does Hoskinson support his claim to get limited supply from the high cost of production. Rather, it views constraint as the product of monetary policy and utility of an underlying asset.
“If you’re making two paintings, one by hand and the other by machine, if they both look the same and the demand for both is the same, you’re putting in a thousand times more effort to make one than the other.”
According to the famous developer, a suitable digital standard; requires smart contracts, metadata standards, and highly efficient systems that perform millions of transactions per second. Hoskinson says Bitcoin has certain limits in this regard, but it certainly has the potential to “evolve.”
Besides, he says it is “not impossible” for cryptocurrencies to become the world’s reserve currency, like the one he co-founded (Cardano). But no matter which digital asset has this quality, the crypto billionaire believes that “dedollarization” is inevitable.
The decrease in dollarization is mainly due to America’s increasing national debt. According to USDebtClock.org, the current US national debt is $30 trillion. This value is expected to approach $89 trillion by 2029, which will significantly slow down economic growth in the country. But even then, the crypto billionaire thinks that such an event will not happen overnight.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.