Charles Hoskinson did an interview recently with Jemima Kelly of the Financial Times. At first I thought it was a rather hostile interviewer and very good calm responses from Charles. However on a second viewing I could see areas where the reporter wasn’t getting a direct answer to their questions and hence why they might have started getting frustrated.
So here are some succinct answers for Jemima Kelly.
Decentralization: There are several ways people talk about decentralization. Decentralization of the protocol or computing layer (as Jemima put it) is one such decentralization. You can certainly have centralized entities building out this decentralized layer.
Decentralization of the cryptocurrency associated with that protocol is another aspect. Is a large percentage of the token held by a few entities or is it spread out across a wide number of the general (crypto) population.
Then there is decentralization of who controls the future of that protocol. This is where things like on-chain voting/governance comes into it, though not many chains are planning to enshrine that idea to the same extent like Cardano. Instead it may be decentralized decision making without on-chain voting such as is the case with Ethereum.
Utility: The NFT space does actually have a lot of people that are passionate about the specific NFT collection. I guess having images makes it possible for people to from strong emotional ties. I’m not a huge fan of NFTs myself but I can see that there is a genuine passionate sub-culture there.
But that is still not real utility. For examples of real utility in the crypto space check out @wmtoken, @book_io , and Atala Scan, and Atala Prism – both of which is built on blockchain technology. And that’s just a few examples.
Crypto philosophy: There is certainly a lot of greed in the crypto space and a lot of scams to go along with it. But pushing aside those types of people, there is also a core set of people, and I’d hazard to say a substantial portion of the Cardano community, that do believe in blockchain technology as a way to take back control from an increasingly centralized world. The lines do get blurred. You can’t tell who really believes in it, and who is happy to abandon those principals if it means they grow their wealth. (And that’s certainly a topic for another day). But at least with regards to the Cardano protocol and community, I’d say those ideal still hold true.
The idea that scarcity is what gives crypto value is one that comes from the Bitcoin community. It’s not an argument I’m too strung up about but I understand where they are coming from. Fiat money (pounds and dollars) is only worth something because enough people believe someone else will value it as much as them, further down the line. (This is quite a deep idea that took me a while to fully understand and appreciate when I first heard it).
So when you have a crypto like Bitcoin where enough people believe in it, and that crypto has a finite limit, then yes over a long time horizon scarcity will play a role in its value, hence why Bitcoin is often referred to as Gold 2.0. While there are other cryptocurrencies that can mimic the same features as Bitcoin, Bitcoin has the brand value and the network effect.
There is a lot more I can say about Bitcoin though, which you can read bout in a series of articles I’ve written previously. I’ll include links to them at the end of this post.
However for people in the “Alt-coin” space (i.e. not Bitcoin), we believe that actual usage of the cryptocurrency is what will drive value, not just simply the fact that it is “scarce”. This is why the the early stage developments in real world application that is emerging is of substantial interest.