The Ethereum co-founder told Coin Telegraph: “Bitcoin needs the industry to survive, and sure as hell needs the exchanges and all the other infrastructure because it’s not self sufficient in that dimension.”
While Bitcoin originated the crypto industry over a decade ago, Hoskinson believes it now depends on that industry to remain relevant. The criticism follows recent comments about Bitcoin maximalists, and the SEC’s treatment of the original cryptocurrency.
Hoskinson says that the rest of the crypto industry no longer relies on Bitcoin to the same extent. Other networks like Ethereum (ETH) have carved out major roles for themselves, and new innovations in areas like decentralized finance and non-fungible tokens are happening largely outside of Bitcoin.
During Abu Dhabi Finance Week, he told Coin Telegraph: “The industry doesn’t need Bitcoin anymore to survive.
“It’s nice to have a digital asset like Bitcoin that has that reputation, and it’s digital gold. But remember, at the end of day, it’s a token with a deflationary monetary policy.”
Because of this, he says a different cryptocurrency could potentially displace Bitcoin as the premier digital store of value.
Hoskinson was a founding member of both Ethereum and Cardano, two blockchain networks that have changed their original way of working, by introducing things like smart contracts and proof-of-stake. He expressed disappointment that the Bitcoin community did not embrace what he sees as useful upgrades that could help keep it more competitive.
Referring to Bitcoin’s “insular” culture, Hoskinson said: “I just don’t see how that survives. It’s a religion. It’s not an ecosystem.
He added: “And then you wake up and 98% of the stuff you do is outside of Bitcoin. And you start asking yourself, why do I really care about that? It just becomes another asset.”
When it comes to regulation, Hoskinson emphasized the need for an open dialogue between government and industry. He said: “You need to have an open door policy where it’s very easy for the industry as a whole to talk to you and engage with you when there’s ambiguity.”
He also called for regulatory flexibility to accommodate innovation, stating regulators should “regulate not on categories and say it’s a security or commodity, but you look at the specific use cases of the actors, the transactions, geography, and then you say – okay – for this use case, in context, we regulate it this way.”
Hoskinson slammed the “bizarre” regulatory approach in the United States that tries to put all cryptocurrencies into a security framework.
Hoskinson advocated basing policies on how cryptocurrencies are actually used and said compromise is was possible if the government worked with the industry rather than, in his view, attacking it.
Whether Bitcoin rises to meet the mounting competition or slowly declines into obscurity remains to be seen. But it clearly faces a more complex and challenging environment than the blank slate Satoshi Nakamoto first introduced in his 2008 whitepaper.