The mood on the crypto markets is good, with Bitcoin (BTC) trading at a high for the year. But Charles Hoskinson, founder of Cardano (ADA), is playing spoilsport with general criticism of the development of the crypto industry.
Charles Hoskinson not only belongs to the premier league of crypto celebrities as co-founder of Ethereum (ETH) and current head of Cardano (ADA) – the 36-year-old has also attracted attention dozens of times for his aggressive communication. In his latest video monologue (here on X), Hoskinson takes a swipe at the crypto industry that has met with a critical response far beyond the Cardano community. Charles Hoskinson is concerned about three points:
1. stablecoins such as Tether (USDT) or USDC pose a danger for Hoskinson. They have become far too dominant for the crypto markets and could also make lone decisions due to their centralized principles. Hoskinson uses a chart to illustrate that, in US dollar terms, leading stablecoins are responsible for around 70 percent of all transactions carried out on blockchains. Just a few years ago, Bitcoin (BTC) and Ethereum (ETH) were the two leading cryptocurrencies and absolutely dominated the market. Hoskinson warns that the super-strong role of stablecoins in the crypto markets could lead to a situation where their issuers interfere in hard forks and take sides. After all, a classic stablecoin such as Tether cannot simply double its dollar reserves in order to support two cryptocurrencies with US dollars in crypto after a hard fork.
But the solution that Hoskinson proposes is algorithmic stablecoins. Such concepts are theoretically capable of dealing fairly and independently with hard forks, for example. But algorithmic stablecoins have been scorched earth for large sections of crypto investors since the collapse of TerraUSD in May 2022 at the latest. In the Cardano ecosystem, the algorithmic stablecoin DJED has also repeatedly lost the promised 1:1 peg to the US dollar. At DeFiChain (DFI) with Julian Hosp, it is the algorithmic stablecoin DUSD that heralded the demise of the entire ecosystem in the summer of 2022. The founder of Nano (XNO), Colin LeMahieu, responded to Hoskinson’s comments with a piece explaining why algorithmic stablecoins cannot work, no matter how attractive the idea sounds.
2) Hoskinson criticizes the attitude of many investors towards Bitcoin, Cardano and the like, who only focus on profits and ignore the ethos and basic principles of cryptocurrencies. According to Hoskinson, hardly anyone on Reddit, for example, is still concerned about decentralization and new market participants, but only about how to make a profit.
3) Hoskinson also sees little good in the approval of Bitcoin ETFs in January, even though this gives the crypto markets a tailwind. Instead, Hoskinson fears that Bitcoin ETFs and possible imitators will increase the influence of traditional financial companies and centralized exchanges on the crypto industry. However, according to Hoskinson, the original aim was to create a decentralized, censorship-resistant and transparent alternative to these structures, in which everyone has the same rights and opportunities.
Conclusion: food for thought from Cardano mastermind Charles Hoskinson
Vitalik Buterin, inventor of Ethereum, had already warned at the beginning of the year that crypto must not lose its cyberpunk beginnings. According to Buterin, if Ethereum only fulfilled monetary purposes, authenticity and independence would be lost. In terms of content, this is not far removed from the wake-up call that Hoskinson is now attempting, and which probably speaks from the soul of many Bitcoin supporters of the early years.
But today, Hoskinson is automatically associated with Cardano. Cardano and ADA have been in a deep crisis for more than two years in the search for use cases, which is also reflected in the price curve. Accordingly, no one is proposing Cardano ETFs yet and the large, established stablecoins are making a curve around the ADA ecosystem. Therefore, Hoskinson’s general criticism of the state of the crypto industry is on shaky ground – his comments can also be interpreted as self-pity and a distraction from the Cardano problems.
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