Charles Hoskinson does not see Bitcoin (BTC) as a world reserve currency

on Feb 14, 2022
  • Charles Hoskinson has said that Bitcoin will not be the world’s reserve currency.
  • According to the Cardano founder, Bitcoin failed to evolve to meet the current industry standards.
  • He also added that it was not impossible for Cardano to the world’s reserve currency.

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Cardano’s founder, Charles Hoskinson, does not see a time when Bitcoin (BTC/USD) will be adopted as the world’s reserve currency. Hoskinson, who is also a co-founder of the Ethereum network, has not been a major proponent of Bitcoin.

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Hoskinson points to Bitcoin’s limitations

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In a recent interview, Hoskinson pointed to various weaknesses of the Bitcoin ecosystem that would prevent it from being the world’s reserve currency. He said that while Bitcoin had the advantage of being a pioneer in the ecosystem, the energy-intensiveness of the network would make it more centralized.

According to Hoskinson, he did not understand why the Bitcoin mining process needed to be energy intensive, while there were efficient alternatives. He also expressed his skepticism that the high cost of production contributed to scarcity. According to Hoskinson, the feature of scarcity came from the monetary policy of the underlying asset and utility.

“If you produce paintings and one you have to paint by hand while the other you do with the machine and they both look identical, and the demand is the same for both, you are just spending a thousand times more effort to do one versus the other,” Hoskinson said.

Despite the criticism, Hoskinson believes that the Bitcoin network could “certainly evolve.” One of the ways that the network could do this is by offering smart contracts, metadata standards and achieving a high throughput by processing more transactions per second.

Hoskinson also stated that it was “not impossible” for Cardano (ADA/USD) to become the world’s reserve currency. After the Alonzo hard fork upgrade, ADA has gained more utility due to the utilization of smart contracts on the platform.

Hoskinson says de-dollarization will continue

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Hoskinson also added that de-dollarization would continue to be experiences. The rising level of inflation in the US has been attributed to the growing adoption of cryptocurrencies. However, the transition of countries from the US dollar to alternative currencies would not happen instantaneously. 

Hoskinson said that this transition would be like a “light switch” where everyone would one day be off the US dollar into alternative currencies.