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Crypto – Ethereum founder Buterin questions Dorsey and Zuckerberg’s Bitcoin plans

Jack Dorsey, founder of Twitter and Fintech Square, wants to found a new company whose business model is to be based on the crypto currency Bitcoin and the principles of Decentralized Finance (DeFi). Tech companies that are still relatively young are generally fond of cryptocurrencies. This is in contrast to traditional companies and especially the established financial world, which is still looking for ways to incorporate the crypto boom into their business.

According to Vitalik Buterin, the inventor of the blockchain-supported open source network Ethereum, Dorsey’s project will not take off. Because Bitcoin is not designed for the necessary functions. The still largest capitalized coin in the world is essentially a “cryptocurrency for domestic use,” Buterin told Bloomberg Television. Instead, he praised the advantages of the Ethereum network, which runs the second largest cryptocurrency, Ether.

“With Ethereum there is an inherent function that allows essentially direct use of Ether or Ethereum-based values ​​in smart contracs,” said Buterin. “So in these secure boxes that allow any guidelines for the further use of these values.” In order to be able to apply such rules, Dorsey would have to create his own system for better or for worse.

Ether is doing better than Bitcoin

While Bitcoin is praised by its fans as a store of value and an alternative to conventional currencies and gold, Ethereum is gaining approval, not least thanks to its network properties. With the powerful and open source software, which allows various applications, it has the prerequisites to become a real backbone of decentralized transaction systems.

On the Ethereum platform, software developers can program programs for their own needs – in the form of smart contracts. Ethereum is also switching from proof-of-work to proof-of-stake protocols, which require significantly less energy-intensive computing power to verify transactions. Proof-of-stake verifications on the blockchain are therefore also more environmentally friendly.

Bitcoin and Ether have both depreciated significantly since their highs in April. While Bitcoin is still worth 55 percent more than at the beginning of the year, Ether posted a price increase of a good 300 percent. From the fall in crypto prices four months ago, Ether has recovered better than Bitcoin.

The prices of ether (red) and bitcoin (green) against the dollar in the past twelve months (chart:

In his Bloomberg interview, Buterin did not spare criticism from another tech millionaire: He was also critical of Facebook founder Mark Zuckerberg. Zuckerberg envisions the further development of the social media and advertising platform Facebook into a “Metaverse Company”. Strictly speaking, he wants to create an ecosystem or a virtual world in which people interact using avatars and use digital values.

Zuckerberg clearly wants to anticipate the next phase of the Internet, said Buterin – “before the rest of the world strives for something else and Facebook, so to speak, sinks into meaninglessness.” Facebook already made a name for itself in cryptocurrencies in 2019 when the Libra project, now known as Diem, became popular. Libra caused quite a bit of controversy at the time.

“Much distrust on Facebook”

From Buterin’s point of view, there is a lot of distrust surrounding Facebook. Building your own platform could fail. Zuckerberg would be better off using the existing blockchain.

In the Bloomberg interview, Buterin went one better: In his view, the blockchain is not only a threat to long-established companies and banks, but also to the social media Facebook and Twitter. Newer communication platforms could displace them. When asked where Ethereum will be in ten years, Buterin commented, “Hopefully we’ll run the Metaverse then.”

At least when it comes to the importance of ether among cryptocurrencies, experts are increasingly agreeing with Buterin: Ether could overtake Bitcoin over time. Ether will develop better than Bitcoin in 2021 and establish itself “possibly within five years” as a larger capitalized cryptocurrency, said Nigel Green from the consulting firm deVere Group.

Bitcoin’s share of the crypto market is currently 44 percent, while that of ether is 19 percent. However, Bitcoin still comprised 73 percent of the market at the end of 2020, while Ether held half of today’s market share. Since the crypto world moves quickly, predictions about the future use of individual coins are fraught with uncertainty.

(Bloomberg / cash)

Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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