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Cardano founder Charles Hoskinson explained why he thinks Bitcoin mining should be stopped and all existing units of the assets should be converted into wrapped Bitcoin (wBTC) in an Oct. 3 Twitter broadcast.
Wrapped Bitcoin is BTC on smart contracts-enabled platforms like Ethereum (ETH), Cardano (ADA), and others.
Bitcoin’s PoW is the “gold mine” – Charles Hoskinson
According to Hoskinson, if Bitcoin’s network is shut down, the flagship digital asset can continue to exist as wrapped Bitcoin on other networks. In his view, the industry would not need the proof-of-work consensus mechanism because it is the “gold mine” to get the asset.
Hoskinson pointed out that the Bitcoin blockchain is only optimized for the mining process presently. According to him, efforts to build on the blockchain have recorded little success because it is not designed for that purpose.
The Cardano founder highlighted that Bitcoin’s “gold mine” consumes a lot of energy, considering that the number of BTC left to mine is less than what is already in circulation. He stated that the continued running of Bitcoin mining is not a good investment of energy.
Meanwhile, Hoskinson conceded that Bitcoin maximalists wouldn’t agree with his idea because they would argue that “[PoW] is the source of truth and a counter-balance to banks.”
Wrapped Bitcoin will broaden BTC usage.
Hoskinson stated that moving all mined Bitcoin to the broader crypto ecosystem through wrapping can help broaden its usage and adoption.
Citing El Salvador’s adoption, Hoskinson said that while Bitcoin is digital gold with real utility and can act as a good store of value, the asset is not a good means of exchange and unit of account because of its volatility.
So, wrapped Bitcoin could be used to create stablecoins that can serve as a means of exchange and unit of account because they are on other smart contracts-enabled networks built for those purposes.
Hoskinson said:
“[Wrapped Bitcoin] could be used in all kinds of Dapps and smart contracts and potentially be used by nation-states to create a means of exchange and unit of account to actually have a stable currency they could use with a sound monetary policy.”
According to him, the wrapped Bitcoin is still Bitcoin because it would still have all the properties and features of the asset.
Hoskinson predicted that more wrapped Bitcoin would be on other blockchain networks in the next five years.