As per him, Bitcoin’s high power consumption will exacerbate centralization in a sector where decentralization is a goal. Instead of relying on a power intensive mining process, he thinks the sector should prioritize energy-efficient options. He substantiated his criticism with the assertion “scarcity results from a significant cost of manufacturing” when presenting the case.
“If you make two identical canvases, one of which must be painted manually and the other by machine, and yet both appear similar, and both command similar demand, you are simply expending a thousand times additional work on one than on the other.”
This is not the initial time that concerns regarding Bitcoin’s excessive energy use have been highlighted. Numerous naysayers have consistently emphasized how Bitcoin’s power consumption is detrimental to the ecosystem; nevertheless, cryptocurrency fans feel that the events might stimulate the use of renewable energy.
Additionally, the Cardano creator stated that any virtual asset seeking to bridge that gap and earn the label of “world’s reserve currency” must have smart contracts, metadata rules, and increased throughput capable of completing massive transactions per second. Interestingly, none of these are applicable to Bitcoin, since the digital asset cannot yet meet all of these characteristics.
This implies that digital assets such as Ethereum, Cardano, Solana, and other smart contract-supporting assets have the ability to solidify their status as the world’s reserve currency. Nevertheless, it’s worth noting that Square, founded by Jack Dorsey, is now focusing on introducing decentralized finance to Bitcoin’s blockchain, implying that the currency may potentially support smart contracts.
The cryptocurrency billionaire remarked that de-dollarization will not occur overnight. Hoskinson opined that the potential of such a scenario would become increasingly evident if the US debt burden grows as a result of individuals switching to other monetary systems.