Cardano founder calls on SEC to pay attention to BTC

The founder of the popular crypto project Cardano, Charles Hoskinson, believes that Bitcoin is not decentralized enough. The developer shared this opinion on his microblog. Hoskinson’s post sparked a discussion about the advantages and disadvantages of BTC, which, among other things, was joined by the famous cypherpunk Adam Back

What’s wrong with Bitcoin, according to Hoskinson

IN two-hour AMA session Hoskinson shared his thoughts on the problems of the first cryptocurrency. In the video, the developer claims that many members of the crypto community mistakenly consider BTC to be a decentralized project. To support his point of view, he drew attention to the possibility of a 51% attack on Bitcoin.

As of the time of writing, most of the BTC hashrate is occupied by only 4 mining pools. The concentration of such a volume of computing power in the hands of just a few pools reduces the level of Bitcoin decentralization and negatively affects the security of the project.

The founder of Cardano also complained about the unfair pressure from American regulators that the creators of many cryptocurrencies face. In his opinion, the US Securities and Exchange Commission (SEC) is making unfounded accusations against developers for issuing unregistered securities in the form of tokens. In particular, Cardano (ADA) was targeted by the regulator. The commission saw signs of an unregistered security in the cryptocurrency.

In his opinion, the SEC should direct part of its resources specifically to Bitcoin, since signs of a security can also be traced in cryptocurrency.

How US regulators evaluate cryptocurrencies

The SEC considers Bitcoin a commodity. In other cryptocurrencies, according to the regulator, there are signs of illegally issued securities. When determining the status of coins, the Commission is guided by the outdated Howey test. It was created long before the advent of cryptocurrencies. Therefore, many participants in the crypto community believe that the Howey test is incorrect to use to determine the status of digital assets. Despite the claims of market representatives, SEC commissioners claim that they have enough tools to regulate the crypto industry.

The unfair regulatory environment in the United States, according to members of the crypto community, provoked the flight of crypto companies from America. The dissatisfaction of market representatives with the actions of the SEC became the reason for discussing the possible dismissal of the head of the Commission, Gary Gensler.

The crypto community’s reaction to Hoskinson’s criticism

The publication by the founder of Cardano divided the crypto community into two camps. The first are confident that Hoskinson is wrong in assessing the status of Bitcoin, while others see a grain of truth in his statements.

The developer believes that there is no fundamental difference between BTC, ETH and ADA in terms of status. Cypherpunk Adam Back disagreed with his statement.

“It’s simple. Bitcoin didn’t have an ICO. Most people thought that these coins had no value. They were mined from scratch. Decentralization is when a project does not have a CEO, when the project has not gone through ICO, registrations, and so on. Therefore, Cardano and Ethereum fit the Howey test, but Bitcoin is a commodity that cannot be fit to the test,” so Beck explainedwhy Hoskinson, in his opinion, is wrong.

Hoskinson notedthat Cardano did not go through an ICO in its classic form. Instead, the developers held an airdrop. The arguments did not convince Beck. Cypherpunk believes that airdrops, premines, and other marketing efforts can still be considered part of the ICO. Back also noted that the creators of Cardano were counting on profit from the project, which means ADA falls under the Howey test.

Hoskinson’s followers, in turn, noticed that many people forget about Bitcoin developers. Before leaving the network, the creator of the cryptocurrency, Satoshi Nakamoto, handed over management to programmer Gavin Andresen. Other developers also joined in managing the project. Therefore, according to members of the crypto community, Bitcoin has persons who can represent the project, which means BTC can be brought under the Howey test. Beck replied To clarify the claim – the developers who manage Bitcoin cannot manage its consensus. Therefore, the cypherpunk is sure, statements that someone controls BTC and that the coin is centralized are groundless.

Another member of the crypto community notedthat Nakamoto himself may be the holder of a large volume of coins. There are opinions according to which the developer’s wallets may contain 10-20% of the entire cryptocurrency emission. If one day Nakamoto decides to sell his BTC holdings, the coin could collapse. The concentration of a large volume of cryptocurrency in one hand is another signal that indicates an insufficiently high level of Bitcoin decentralization. Beck did not respond to this argument.

Let us remind you that Satoshi is not the only holder of a large batch of bitcoins. Many coins ended up in the wallets of the authorities of a number of countries. Country authorities control over 2% of the issue, private companies – 2%, and public companies – 1%.

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