According to IOHK CEO Charles Hoskinson, Tesla is expected to ditch bitcoin and turn to the world's fifth most valuable token, Cardano (ADA) instead. During a podcast by MIT researcher Lex Fridman, Hoskinson explained why he believes Cardano is far superior to bitcoin.
Tesla should choose Cardano if he truly cares about sustainability
The huge concerns surrounding the energy-hungry Proof-of-Work algorithm on which BTC is based have been going on for years. Debates revolving around cryptocurrency energy consumption escalated after Tesla CEO (Tesla shares - TSLA ticker) Elon Musk announced in May that the electricity producer would stop accepting bitcoin due to high energy consumption.
Musk revealed that he would be looking into alternatives that consume less than 1% of his energy per transaction, and most people have suggested XRP and Cardano (ADA), as they are more sustainable. Interestingly, Hoskinson even invited Musk to his farm in Longmont.
In his five-hour interview with Fridman on June 16, Hoskinson argued that Cardano should be Tesla's first choice if they truly care about sustainability and reducing carbon emissions.
“Well, if they really care about alternative energy, sustainability, carbon reduction and carbon neutrality, you can't find yourself in a system where there is no built-in mechanism to limit energy consumption,” he said.
Founded by Hoskinson, co-founder of ethereum, Cardano uses a Proof-of-Stake (PoS) system which is better in terms of energy savings.
Hoskinson speculated that unless Tesla can argue that the proliferation of bitcoin will legitimately translate into the proliferation of wind, battery and solar power, then they should shift their focus to the greener cryptocurrency, otherwise they would only exacerbate the repercussions. environmental. Hoskinson has in the past indicated that Cardano consumes only 6 gigawatt hours of energy per year - an infinitesimal fraction of the immense energy that bitcoin will use.
Bitcoin's low programmability is a bug, not a feature
In addition to environmental concerns, Hoskinson also noted that bitcoin is the "least programmable" of all crypto-assets, which essentially prevents it from doing "cool, unique and sexy things."
For example, if Tesla wants its vehicles to start talking to each other and connect to 5G, it would be impossible to build an Internet of Things (IoT) layer on bitcoin.
“You need a fundamentally different infrastructure to create such a token and regulate such a system and have these things independently trade and do business together. You need DEX and stablecoins and all kinds of mechanics to make something like this possible. Well, that's really good for Tesla if they can figure it out. "
For Hoskinson, bitcoin has low programmability, it can't allow you to create something cool, and it doesn't have a native way of issuing an asset. In this regard, he claims that the flagship cryptocurrency has existed until now solely due to the large amount of capital paid into the asset.