Charles Hoskinson, the founder of Cardano, expressed what he thought about Bitcoin and Ethereum. The two best-known cryptocurrencies.
In different interviews, he wanted to leave his small grain of sand and say what he thought about Ethererum’s switch to proof-of-stake, Bitcoin’s continued use of proof-of-work, and the future of both cryptocurrencies.
We’re talking about an interview he did for Cointelegraph and a thread he made on Twitter in which he was very relaxed and gave both investor communities a few tips.
Let’s not forget that Cardano has always been a fierce rival of the Ethereum network. Because of this, the two blockchain communities have been at odds for a long time.
But now he “sits down” and says what he really thinks. Let’s break it down.
Charles warns about a possible liquidity crisis in the future
The founder of Cardano talks to the Ethereum community and warns them about a possible liquidity crisis in the future. If we look at what people are saying about Ethererum, we can get a very clear headline: the proof-of-stake mechanism it just got has a big effect on how liquid ETH is and could cause a crisis in this cryptocurrency.
And the reason is that, even though everything seemed to be going well at first, a small change happened. The problem is that this change, called “The Merge,” hasn’t changed the value of the cryptocurrency. Instead, it’s following the same pattern as Bitcoin, which is to keep going down.
The economy is in bad shape. According to the Consumer Price Index, U.S. inflation will remain strong for the foreseeable future. The lockout mechanism that prevents investors from accessing Ether until the next upgrade is another problem, argues Hoskinson. All of this can be costly.
“There will be less and less trading of Ether on the market,” he said. “And then what will happen is that there will be a liquidity crisis and a lot of volatility,” Ella adds.
Charles Hoskinson says that Bitcoin mining is a bad idea
On the other hand, he explained why he thinks Bitcoin mining should stop. Besides, all existing units of the asset should be changed to Wrapped Bitcoin (wBTC). Wrapped Bitcoin is simply BTC on platforms for smart contracts like Ethereum (ETH), Cardano (ADA), and others.
Hoskinson says that if the Bitcoin network is shut down, the most famous digital asset. Bitcoin, can still exist in other networks that don’t hurt the environment as much.
And because of this, he thinks that Bitcoin and Ethereum need a big change. He thinks that this cryptocurrency’s proof-of-work uses a lot of energy, since the number of BTC that still needs to be mined is less than the number that is already in circulation.
Turning to the famous adoption of Bitcoin in El Salvador, Hoskinson says that even though Bitcoin is digital gold with real use and can be a good way to store value, it is not a good way to buy and sell things or keep track of money because it is so volatile.
Wrapped Bitcoin (wBTC) could be used to make Bitcoin stablecoins that can be used as a medium of exchange, since they are already in other networks made for smart contracts made for that purpose.