Billionaire chief executive of Citadel, the renowned American hedge fund, Kenneth Griffin believes that Bitcoin would be replaced as top dog in the crypto space by a currency based on the Ethereum network. The capital under management at Citadel is a whopping $40 billion, which is almost a quarter of the trading volume that exists in the stock market in the United States. The New York Summit hosted the DealBook Summit on Wednesday, November 10th and during it, the CEO said that he believes an Ethereum-based conception would replace Bitcoin in the next generation of cryptocurrencies.
He went on to say that a currency based on the Ethereum network can offer a lower cost per transaction as well as higher transaction speeds. At present, Ethereum is just slightly faster than the pioneer cryptocurrency, but the implementation of Ethereum 2.0 will see costs being reduced and transaction speeds scaling up significantly. Griffin has been skeptical of cryptocurrencies for a long time, particularly when it comes to Bitcoin because he says it doesn’t have any commercial use cases. He did note that cryptocurrency and its underlying blockchain technology were really interesting and also said that they were a powerful solution for maintaining a decentralized ledger worldwide.
However, he concluded that they weren’t really the solution we need. According to the chief executive, people are focused on a world of new creation and ideas, but when it comes to crypto, this passion is misplaced. He claimed during the summit that there are a number of issues associated with crypto that haven’t been addressed properly, including the high costs, the risk of frauds and also the energy expenditure. He said that managing payments on Bitcoin is highly expensive. The current cost of every Bitcoin transaction is $4.1. In contrast, a 1.4% to 3.5% transaction fee is applicable in the case of credit cards on popular networks, such as American Express, Visa and MasterCard.
The cost for debit cards is around 0.5%. Griffin said that when it comes to sustainability, Bitcoin is making a massive contribution to global warming as opposed to any other payment methods that are used globally. The annual carbon footprint of bitcoin is around 90.48 tonnes of carbon dioxide. The carbon footprint of every bitcoin transaction is equal to 2,008,657 Visa transactions. Nonetheless, there are some advantages as well. The lowest cost forms of energy are used for Bitcoin mining, such as surplus power that would otherwise go to waste and renewable energy.
Furthermore, it is also very difficult to quantify the amount of emissions that financial institutions and banks contribute. He was asked if he was worrying about missing the crypto train and Griffin said that he believed it was still too early and the train hadn’t left the station as yet. Earlier this year, a number of rumors had been going around about Citadel being responsible for the trading limits that had been imposed for GameStop shares on the Robinhood platform. During the summit, the CEO denied any involved in the saga and referred to it as a bad joke.