Charles Hoskinson has warned of a coming decentralized sector identity war as the crypto industry pushes toward widespread usage with many centralized players avidly chasing decentralized identities.
Cardano CEO and founder Charles Hoskinson claims that a cross-blockchain decentralized identity layer will be essential to the survival of cryptocurrency in a recently released Q&A from the 2022 Web Summit, which was conducted in early November 2022.
Notably, the founder of Cardano stated that after the smart contract battles are already over, decentralized identity would be huge while pointing out that participants in the industry are aware that the region is “the choke point.”
Hoskinson predicts that the wars will most certainly intensify over the next 24 months, and that the crypto industry will face a grim future if decentralization is not properly implemented.
“It’s going to be one of the most competitive areas in the space in the next 24 months. The smart contract wars are over; it’s commoditized, and lots of stuff is happening. The identity wars have yet to begin, and this is going to be a big one.”
Decentralized identities (DIDs), according to Charles Hoskinson, are essential for maintaining compliance and avoiding falling prey to exchanges’ interpretations of anti-money laundering legislation.
He continued by saying that blockchain transactions might incorporate a decentralized identity that adhered to Decentralized Identity Foundation principles.
“You can do it on a transactional level between regulated entities and non regulated entities. And it just works, and [it’s] seamless, and you pay a transaction fee.”
Hoskinson noted that centralized exchanges like Coinbase and Kraken may be able to limit the movement of your cryptocurrency off their exchanges because they must adhere to regulations set forth by the Financial Action Task Force, an organization that monitors global efforts to combat money laundering, including the so-called Travel Rule.
Hoskinson, who is also the co-founder of Ethereum, emphasized that the winner of the war should be decentralized in order to protect the tenets of the cryptocurrency industry.
“There’s a boatload of entities that are starting to subtly get involved in this stuff, and because they know this is the choke point and they really want to control it, and for the sake of the industry, we need to make sure that whoever wins is decentralized.”
Hoskison had previously stated his dissatisfaction with the majority of cryptocurrency projects going public on the basis that they were decentralized, but he insisted that there should be a precise measure to practice.