In an interview with Forbes, Cardano’s inventor and the CEO of Input-Output Global (IOG), Charles Hoskinson spoke about consensus mechanisms, energy consumption and the potential future for the industry. Based on interoperability, a topic that the IOG has been developing, Hoskinson criticized Ethereum for trying to “trap” users in its ecosystem.
In the next three to five years, as estimated by the CEO of IOG, the crypto ecosystem can be connected through the “blockchain internet”. This will allow the user to remain “liquid” and can jump from one platform, such as Ethereum, Polkadot or Cardano, to another with the click of a button. Hoskinson said:
I think that in the next three to five years what will happen is that our industry will converge to a Wi-Fi moment where it just works (…). You click a button, now you’re in Cardano. It takes a few minutes, a few hours and you are there. This means that it will be a race to the bottom, in terms of operating costs.
The platforms will compete to reduce costs for consumers. Thus, they will try to make their blockchains much “cheaper to operate”. IOG has focused on the development of a communication protocol between chains. As Hoskinson explained, this will allow any user or platform to “represent information of value across systems” and move it. The rest can be decided by the consumer:
(…) Focus on the ability to move information, value and identity between the chains, and then you kind of let the markets decide where things are going to live.
Is Cardano more energy efficient than Bitcoin?
Cardano’s inventor addressed a topic that has been making headlines in recent weeks, the issue Proof-of-Stake versus Proof-of-Work as a consensus mechanism and the energy consumption of Bitcoin.
In PoW, the entity that is going to mine a block, for example, in the Bitcoin network is selected with a “meritocratic process”. Once that entity extracts enough hashes, it can obtain a “golden ticker”, as Hoskinson explained when adding the following:
The higher the value of the asset, the more competition you get and the more energy you spend. 99.99999997%, if not more, of the energy consumed by bitcoin comes from this first stage.
In contrast, PoS operates with a mechanism that selects an entity to issue a block, considering the amount of a token committed to the process. For this consensus, the lottery that launches the “golden ticket” is synthetic. In Hoskinson’s opinion, PoS is more energy efficient:
The advantage of proof of stake is that because you don’t have that huge overhead and energy expenditure to decide who can block, (…). So, you end up getting protocols that are much lighter and much more energy efficient. Cardano, for example, is 1.6 million times more energy efficient at the moment than bitcoin.
Hoskinson said that 2021 will be the year of Cardano’s “bust”. In the coming months, the platform will implement smart contracts after integrating native tokens and new features. The future will be focused on governance, the commercialization of Cardano and the adoption by “millions of users” of nation-states.
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