Can bitcoin survive? Vitalik Buterin, co-founder of the Ethereum (ETH) blockchain, frequently discusses his plans for the ETH network’s future. But in a recent interview, he offered broader forecasts for cryptocurrencies, focusing particularly on Bitcoin (BTC). And in the future, the crypto industry’s ruler could run into a significant issue, says Vitalik.
LESS VOLATILITY AND AN ESTABLISHED PLACE FOR CRYPTOS IN 2040?
The Merge, the upcoming combination of Ethereum’s Proof of Work (PoW) and Proof of Stake (PoS) networks, promises to be both thrilling and chaotic. However, Vitalik Buterin, one of the principal co-founders of this cryptocurrency project, adopts a higher perspective and thinks about the industry’s more distant future.
The 28-year-old developer declares in an interview with blogger Noah Smith that he is certain that, in the medium term:
“Cryptocurrencies will stabilize and experience volatility comparable to that of gold or the stock market. What price point they will stabilize at is the primary issue. (…) If cryptocurrencies are well-established in a few niches by 2040, they will replace gold’s role as a value store, develop into a kind of “Linux of finance,” a constantly available alternative financial layer that will serve as the foundation for really significant developments but won’t quite overtake the mainstream.”
Bitcoin risks to finally lack of interest in minors, according to Vitalik Buterin.
Even while he is upbeat about the class of cryptocurrencies as a whole, Vitalik Buterin is more concerned about the future of Bitcoin, the most significant cryptocurrency in existence right now.
Why ? Well, the consecutive halvings that Satoshi Nakamoto designed in the network code would be the problem. These events cause the block reward that miners receive for verifying batches of transactions on the Bitcoin blockchain to be cut in half around every four years.
Therefore, this prize decreased from 12.5 to 6.25 bitcoins in May 2020. From 6.25 to 3.125 BTC in 2024, and so forth… Enough, in Vitalik’s opinion, to ultimately discourage miners:
“A consensus system that unnecessarily costs huge amounts of electricity is not only bad for the environment, it also requires hundreds of thousands of BTC or ETH to be issued every year. [With halvings,] emissions will eventually be reduced to close to zero (…), but Bitcoin will then have to face another problem: how to ensure that it remains secure? (…) The security of Bitcoin will then be entirely ensured by the [transaction] fees, (…) which are [currently] around $300,000 per day, and have not really increased in the last five years. »
In the eyes of Vitalik Buterin, all this justifies the choice to move Ethereum from the Proof of Work consensus to that of Proof of Stake. For their part, PoW consensus advocates believe that PoS poses a problem of plutocracy, where the wealthiest owners of ETH will have much more influence on the governance of the network than the poorest.