Charles Hoskinson, the inventor of Cardano, and the CEO of Input-Output Global (IOG), gave an interview to Forbes magazine, in which he spoke about consensus mechanisms, energy consumption, and what the future may hold for the industry.
Based on interoperability, a subject that IOG is working on, Hoskinson came for Ethereum claiming it is trying to “lock” users into its ecosystem.
Hoskinson predicts that in the next three to five years, the crypto ecosystem could be connected through “the internet of blockchains.” This would let the user stay “liquid” and have the chance of jumping from a platform, such as Cardano, Polkadot, or Ethereum, to another, just by clicking on a button.
The CEO declared:
“I think over the next three to five years what will happen is 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’re there. That means it’s going to be a race to a bottom, in terms of operating cost.”
This means that platforms will be in direct competition with one another, and they would reduce costs in order to attract customers. IOG is working on creating a cross-chain communication protocol, that would enable any user or platform to “represent value information between systems” and still be allowed to move it.
“(…) focus on the ability to move information, value, and identity between chains, and then you kind of let the markets decide where things are going to live.”
Is Cardano More Energy Efficient Than Bitcoin?
For a couple of weeks now, people have been discussing the Proof-of-Stake versus Proof-of-Work as consensus mechanism and the energy consumption of Bitcoin, so Hoskinson touched on this as well.
In the case of Proof-of-Work, the entity that mines a block on Bitcoin’s network is selected via a “meritocratic process.” If an entity manages to mine enough hashes, it may receive a “golden ticket”:
“The higher the value of the asset, the more competition you get, the more energy expenditure. 99.9999997%, if not more, of the energy consumed by bitcoin, is from that first stage.”
On the other hand, Proof-of-Stake relies on a mechanism that picks an entity to issue a block by taking into consideration the amount of a token that is committed to the process. In this case, the lottery that throws the “golden ticket” is a synthetic one. Hoskinson believes Proof-of-Stake to be more energy-efficient:
“The advantage of proof of stake is that because you don’t have that gargantuan overhead and energy expenditure for deciding who gets to make a block, (…). So you end up getting protocols that are much lighter and massively more energy efficient. Cardano, for example, is 1.6 million times more energy-efficient at the moment than bitcoin.”
The CEO also predicts that 2021 will become Cardano’s “overflow” year.