In the world of cryptocurrencies, decentralization is considered sacred by many. But Cardano (ADA) founder Charles Hoskinson warns the entire crypto community about increasing centralization within the industry in a new video titled “Legacy is eating Crypto.” Hoskinson highlights the dominance of some major players in the Bitcoin (BTC) and stablecoins space, a development that he believes runs counter to the core principles of decentralization on which the crypto world is built.
Dominance of stablecoins and institutional players
One particular area of concern for Hoskinson is the dominance of stablecoins such as Tether (USDT) and USD Coin (USDC). These stablecoins represent a significant portion of the market, accounting for 70% of on-chain volume, while only accounting for 10% of the entire crypto industry. According to the Cardano founder, the centralization of stablecoins poses enormous risks.
Legacy eats crypto
— Charles Hoskinson (@IOHK_Charles) February 12, 2024
Additionally, Hoskinson expresses concern about the recent popularity of spot Bitcoin exchange-traded funds (ETFs), where major institutional players such as BlackRock and Fidelity have accumulated significant amounts of BTC. These financial institutions already own many billions of BTC. According to Hoskinson, this trend contributes to the centralization of power within the Bitcoin sector, resulting in a small number of institutions controlling a large portion of the market. This goes against one of the key pillars of cryptocurrency; According to Hoskinson, decentralization could harm the entire industry.
Cardano’s commitment to decentralization
In contrast to the centralized approach of many crypto projects, Cardano relies on decentralization, according to Hoskinson. He highlights that Cardano is designed to be a decentralized platform that allows individuals and communities to participate in the development and governance of the network. He argues that this approach will allow Cardano to thrive despite the challenges of centralization.
In the short term, ADA finds itself in a technical quandary, caught between crucial support levels. A break above $0.62 could be an important signal of a possible bullish move towards $0.68, but that is not the case yet.
As the crypto market continues to grow and more traditional investors and institutions get on board, sooner or later we will see whether these concerns are addressed and whether Cardano’s decentralized approach pays off. In any case, Hoskinson is very concerned that the industry is moving in the wrong direction.