According to IOHK CEO Charles Hoskinson, Tesla should ditch bitcoin en masse and instead turn to the world’s fifth most valuable token, Cardano (ADA). During a podcast by MIT researcher Lex Fridman, Hoskinson explained why he believes Cardano is far superior to bitcoin.
Tesla Should Choose Cardano If It Truly Cares About Sustainability: Hoskinson
Massive carbon footprint concerns regarding the energy-hungry, Proof-of-Work consensus algorithm that BTC relies on have been going on for years. Debates revolving around the top crypto’s energy consumption ballooned after Tesla CEO Elon Musk announced in May that the electric maker would stop accepting bitcoin for payments owing to the network’s high energy usage.
Musk revealed that he would look at BTC alternatives that consume less than 1% of its energy per transaction and most people suggested Ripple’s XRP and Cardano (ADA) as they are more sustainable than bitcoin due to their less-intensive mining and transactions systems. Interestingly, Hoskinson even invited Musk to his farm in Longmont to “finally have the Cardano conversation”.
In his five-hour-long interview with Fridman on June 16, Hoskinson argued that Cardano should be the first choice for Tesla if they truly cared about sustainability and carbon reduction.
“Well, if they truly care about alternative energy, sustainability, carbon reduction, and carbon neutrality, you can’t be in a system where there’s no built-in mechanism to constrain the energy consumption,” he said.
Founded by Hoskinson, who co-founded ethereum, Cardano uses a Proof-of-Stake (PoS) system which is better in terms of energy conservation. “You know, with proof of stake, energy consumption is a negative. You wanna minimize it,” Hoskinson added.
Hoskinson posited that unless Tesla can make the case that the proliferation of bitcoin is going to legitimately result in the proliferation of wind, battery and solar energy, then they should shift their attention to the greenest cryptocurrency, otherwise they would just be exacerbating the environmental repercussions of it. Hoskinson has in the past indicated that Cardano consumes only 6 gigawatt hours of energy per year — an infinitesimal fraction of the immense energy bitcoin is estimated to use.
Bitcoin’s Low Programmability Is A Bug, Not A Feature
Besides environmental concerns, Hoskinson also noted that bitcoin is the “least programmable” of all crypto-assets, which basically hinders it from executing “interesting, unique, sexy things”.
Case in point, if Tesla wants its vehicles to start talking to each other and get connected to 5G, it would be impossible to build an Internet of Things (IoT) layer on bitcoin because of its design.
“You need a fundamentally different infrastructure to create such a token and regulate such a system and have these things autonomously negotiating and doing business together. You need DEXes and stablecoins, and all kinds of mechanics to make something like that possible. Well, that’s really beneficial to Tesla if they can figure this out.”
For Hoskinson, bitcoin is a one-trick pony that has exceptionally low programmability, cannot let you create something interesting and has no native way of issuing an asset. In this regard, he says the flagship crypto has existed up to this point solely because of the vast amount of capital poured into the asset.