- Bitcoin is going to be “eclipsed” by other systems, Emin Gün Sirer, the CEO of Ava Labs told Insider.
- Value is “leaking out of bitcoin” because it is not truly decentralized and uses so much energy, he said.
- Bitcoin has gained 440% in a year, but is lagging behind ether, which has risen 986%, while Ava Lab’s avalanche is up 414%.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Bitcoin will eventually be outpaced by other coins as their faster, cheaper networks digitize more and more of everyday life, according to the founder of Avalanche, Emin Gün Sirer.
Sirer, the CEO of Ava Labs that created the Avalanche network and its native avax token, first got into crypto around 2003, when he created a peer-to-peer digital token called karma. This was six years before the mysterious Satoshi Nakamoto created bitcoin.
Sirer’s creation never took off, but his fortunes in crypto have changed a lot since then. In September last year, he created the Avalanche network, with the help of some of the experts at New York’s Cornell University where he is a computer science lecturer.
Since bitcoin burst onto the crypto scene in early 2009, hundreds, if not thousands, of digital tokens have been created. Some are purely for speculation, others are tied to blockchains populated with decentralized finance applications, while others are used for online gaming, cross-border payments and many other uses.
Bitcoin is still the most widely traded cryptocurrency and boasts a market value of around $1 trillion. But it won’t stay at the top of the pile for long, Sirer said.
“If you ask me what’s going to happen to bitcoin it’s going to continue to grow, but the rate at which it grows is going to be eclipsed by these systems that have a broader vision,” he told Insider in an interview this week on the sidelines of the Token2049 conference.
Could bitcoin become obsolete? “Absolutely,” he said in response to this question.
Sirer said coins like avax, ether, solana or cardano – those attached to networks with multiple use cases thanks to their decentralised finance peer to peer technology – could usurp bitcoin.
He said bitcoin would be obsolete sooner than when it’s meant to run out. Satoshi Nakamoto only made 21 million bitcoins and no more can be created. Bitcoin’s finite quality makes it bullish and a great store of value, Nakamoto said in the coin’s whitepaper, but this is not enough, according to Sirer.
“There is a bigger game out there and there are systems like avalanche playing a bigger game of digitizing the world’s assets and money is just one source of value. There are many other valuable things,” Sirer said.
Bitcoin’s blockchain does not host smart contracts, for example, which can make it difficult to build on, Sirer said.
Smart contracts are a central part of decentralized finance, as they allow two parties to transfer funds or assets automatically without any intermediaries. Blockchains like ethereum, solana, cardano and avalanche itself can run them.
Digital assets like non-fungible tokens also run on these more sophisticated networks. NFTs – basically digital collectors’ items – have become big business this year, changing hands for millions and getting the endorsement of celebrities, star athletes, artists and designers.
Bitcoin has gained 440% in a year, but is lagging behind ether, which has risen 986%, while the performance of avalanche’s avax is on a par, with a rise of 414%.
And the bitcoin network is a lot slower than some of the newcomers. Mining bitcoin or transferring funds takes a lot longer and is a lot more energy-intensive, requiring far greater computing power.
“The method of maintaining its ledger is incredibly consumptive of energy, which means that value is leaking out of the system,” Sirer said.
“(Bitcoin) is going to take some time to chip away at, but I fully expect that bitcoin will be taken over by other systems that are growing,” he said.