Charles Hoskinson does not expect Bitcoin to have a good chance of competing for crypto market share against proof-of-stake-based networks. The Lightning Network does not offer sufficient scaling either.
Charles Hoskinson has long shot into Ethereum, but Bitcoin is no better with the Cardano founder either. In one several hour podcast with Lex Fridman, Hoskinson has stated that the Bitcoin network is too slow and inefficient to keep up with the competition in the long term. The largest crypto currency only lives on its status, but on a technical level Bitcoin is outdated and not competitive with more powerful networks, which Hoskinson certainly also includes his own Cardano network – but also Ethereum (ETH).
The problem with Bitcoin is that it’s so slow. The only reason it still exists is because so much is invested to keep it alive
said the Cardano founder in a recently recorded podcast. Basically, Hoskinson’s criticism is not new. The scaling problem has always been part of the Bitcoin Proof of Work, and has been the focus of criticism of the cryptocurrency for many years. In response to this, new consensus procedures such as the proof of stake have finally been established. Likewise, second-layer solutions such as the Lightning Network. But even this does not do well with Hoskinson. He described the scaling solution as “very fragile”:
Bitcoin is its own worst enemy. It has the network effects, it has the brand name, it has the regulatory approval. But there is no way to change the system even by correcting the obvious drawbacks in that system.
Bitcoin not open to innovation
According to Hoskinson, Ethereum has a clear lead. And not just because of its higher transaction throughput. Because, unlike Bitcoin, the community would not block itself against developments at the network level:
What’s really cool is that Ethereum doesn’t suffer from this problem […] it gets to the point where it has the same network effect as bitcoin, but the community has a completely different culture, they love to evolve and update.
After all, Ethereum would win a direct comparison with Bitcoin in “nine out of ten cases”. But also the flippening competition – i.e. the competition for market dominance – of the two largest crypto currencies is only a snapshot, as other networks – just like Cardano (ADA) – are increasingly vying for market share. For Hoskinson, it is only a matter of time before Bitcoin will give up its first place in the ranking.