Tesla recognizing that Bitcoin is bad for the enviroment shows why Bitcoin will lose to proof-of-stake currencies.
Bitcoin advocates argued that with Tesla buying Bitcoin is a sign that companies in general will do so. We live in a world where any companies that does that is likely going to be downrated on ESG rating while holding technologically more advanced crypto-currency like Polkadot and Ethereum (if 2.0 works) won’t lead to ESG downrating.
The proof of stake currencies can provide low transaction fees that make them more suitable as an actual currency to buy stuff. They can also be used in DeFi applications.
Currently, a lot of bitcoins value is due to it being the biggest crypto-currency. That means in the moment it isn’t anymore it will lose a bunch of it’s value.
Then we will have a phase where all the proof-of-work currencies will lose value while proof-of-stake currencies gain value. The knowledge that proof-of-work currencies have no future will spread and over time the will fall even more in value. In that enviroment they are in a bad situation for being a store of value as well, so people who currently hold them for that purpose will get rid of them.
People of average intelligence who understood proof of work after spending a lot of effort will see that the smart people understand proof of stake being superior and generally the knowledge will also tickle down. Less transaction costs/Less dependency on the miners controlled by the CCP/Faster transactions/Smart contracts(and thus DeFi)/Less enviromental pollution are just too much benefits to make “the old system is tried and tested” seem a reasonable alternative once the proof-of-stake crypto’s are also mature.
It’s unclear how fast that process will happen but I would be very surprised if it doesn’t happen in the next five years.
There’s also the damocles sword for Bitcoin of the Chinese government just deciding to freeze wallets of entities it doesn’t like. Then you get probably multiple competing forks with new mining algorithms that withstand the ASICs and a huge mess and Bitcoin with the Satoshi mining algorithm under Chinese control. Nobody will know which fork to use and the uncertainty will push Bitcoin down. People will likely just want to sell the coins at various forks they have access to and I’m not sure who wants to be the counterparty.
Tesla recognizing that Bitcoin is bad for the enviroment shows why Bitcoin will lose to proof-of-stake currencies.
Bitcoin advocates argued that with Tesla buying Bitcoin is a sign that companies in general will do so. We live in a world where any companies that does that is likely going to be downrated on ESG rating while holding technologically more advanced crypto-currency like Polkadot and Ethereum (if 2.0 works) won’t lead to ESG downrating.
The proof of stake currencies can provide low transaction fees that make them more suitable as an actual currency to buy stuff. They can also be used in DeFi applications.
Currently, a lot of bitcoins value is due to it being the biggest crypto-currency. That means in the moment it isn’t anymore it will lose a bunch of it’s value.
Then we will have a phase where all the proof-of-work currencies will lose value while proof-of-stake currencies gain value. The knowledge that proof-of-work currencies have no future will spread and over time the will fall even more in value. In that enviroment they are in a bad situation for being a store of value as well, so people who currently hold them for that purpose will get rid of them.
People of average intelligence who understood proof of work after spending a lot of effort will see that the smart people understand proof of stake being superior and generally the knowledge will also tickle down. Less transaction costs/Less dependency on the miners controlled by the CCP/Faster transactions/Smart contracts(and thus DeFi)/Less enviromental pollution are just too much benefits to make “the old system is tried and tested” seem a reasonable alternative once the proof-of-stake crypto’s are also mature.
It’s unclear how fast that process will happen but I would be very surprised if it doesn’t happen in the next five years.
There’s also the damocles sword for Bitcoin of the Chinese government just deciding to freeze wallets of entities it doesn’t like. Then you get probably multiple competing forks with new mining algorithms that withstand the ASICs and a huge mess and Bitcoin with the Satoshi mining algorithm under Chinese control. Nobody will know which fork to use and the uncertainty will push Bitcoin down. People will likely just want to sell the coins at various forks they have access to and I’m not sure who wants to be the counterparty.