Cardano founder Charles Hoskinson believes that BTC will not be able to become a world reserve currency due to the energy consumption of mining, and his ADA cryptocurrency is quite suitable for this role.
In a recent
interview Charles Hoskinson stated that even in the long term, Bitcoin will not replace the US dollar due to various flaws in the ecosystem and inconsistency with current industry standards. Hoskinson does not exclude that the ADA cryptocurrency can become the world’s reserve currency. Although last fall he argued that ADA does not have the necessary properties for this: the currency must be both a means of exchange, payment and preservation of values.
Hoskinson explained that the activation of the Alonzo hard fork opened up the possibility of using smart contracts on the Cardano network, which increased the value of ADA. Despite the primacy of BTC in the cryptocurrency space, the energy intensity of the Bitcoin network will make it more centralized, Hoskinson said. He expressed bewilderment as to why bitcoin mining should be energy-intensive when there are more efficient alternatives. Hoskinson also doubts whether the high cost of bitcoin mining can contribute to its scarcity, since the main factor determining the value of an asset should be its monetary policy and utility.
“Imagine that you are selling paintings, one of which you have to draw by hand and another with a machine. Both of them look the same and are in the same demand. It turns out that you just spend a thousand times more effort on one job than on another. It’s the same with bitcoin,” Hoskinson said, citing not the most successful analogy – after all, “handwritten” paintings always cost more than mass-produced reproductions.
The founder of Cardano, for obvious reasons, often criticizes Bitcoin, but he believes that this network has room for development. In his opinion, Bitcoin can use smart contracts and metadata standards. This will allow it to achieve higher throughput by processing more transactions per second.
In December, Hoskinson criticized the decentralized finance industry due to the numerous hacks of DeFi projects. That being said, he sees great potential in a metaverse that could be closely tied to NFTs.
Source: Bits
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