Cardano Founder Reveals NXT Almost Dethroned Ethereum in Early Days: Governance is Key

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Cardano (ADA) founder Charles Hoskinson recently divulged a surprising insight into a crypto project that nearly outshone Ethereum (ETH) during its formative years.
During his tenure as Ethereum’s Chief Executive Officer (CEO), Hoskinson’s greatest fear wasn’t a rival like Bitcoin, but an unexpected contender.
The founder shared an intriguing detail about NXT, a lesser-known crypto, that had the potential to surpass Ethereum in the early 2010s.

Discover the untold story of how NXT nearly outpaced Ethereum and the crucial role governance plays in the success of crypto projects.

The Underestimated Threat to Ethereum: NXT

In a candid conversation with Altcoin Daily, Charles Hoskinson revealed NXT as the crypto project that could have stolen Ethereum’s thunder. He remarked on how NXT’s rapid development and active user base in 2013-2014 left a significant impression on him.

Hoskinson elaborated that NXT, constructed with Java, burgeoned in popularity within merely three months, amassing a fervent community. NXT’s feature-rich platform boasted user-driven assets and plans for smart contract implementation, all while already operating on a proof-of-stake (PoS) mechanism — a considerable advantage over Ethereum’s proof-of-work (PoW) system at the time.

Despite its robust beginnings, Hoskinson noted that NXT’s trajectory drastically faltered. He attributed part of this downfall to inadequate governance and suboptimal token distribution, which caused internal rifts and led to the project’s division into multiple offshoots.

Why Governance is Critical in Crypto

Hoskinson stressed that the lack of a strong governance framework was NXT’s ultimate undoing. He argued that effective governance is what fundamentally distinguishes successful projects from failures, drawing a parallel with corporate giants, where poor governance led to companies like Microsoft lagging behind competitors like Google and Apple.

He proposed that decentralized governance, where every participant has a voice, might hold the key to sustainable growth in the crypto space. Cardano aims to implement this through the upcoming “Chang Hard Fork,” which will transition the network into the “Voltaire” era, focusing on community-driven governance. Hoskinson envisions Voltaire to elevate Cardano with the most sophisticated blockchain governance system yet.

Conclusion

In conclusion, Hoskinson’s reflections on NXT reiterate the profound impact governance has on the longevity and success of crypto projects. While NXT had the potential to outshine Ethereum, its lack of a strong governance framework prevented it from achieving sustained success. As Cardano approaches a significant milestone with the Chang Hard Fork, it remains to be seen how decentralized governance will shape its future. Crypto enthusiasts and investors alike would do well to heed the lessons from NXT’s history.