Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, argued that Bitcoin will not emerge as a global payment network. He called it inefficient and environmentally harmful due to its proof-of-work mining model. However, he does not believe that BTC “has to go” as it could serve as a store of value similar to gold.
Payment systems must use PoS
In a recent interview for the Financial Times, Sam Bankman-Fried (SBF) criticized bitcoin for not being able to process a large number of transactions at a low cost. In his opinion, BTC or any other cryptocurrency based on the proof-of-work (POW) mining model has no future as an effective payment system:
“The Bitcoin network is not a payment network and it is not a scalable network.”
SBF believes that a functional payment network can be created through blockchain protocols using a proof-of-stake (POS) consensus mechanism. Therefore, the transactions will be faster and relatively cheap, which makes them a suitable option for society in general:
“Things that you’re doing millions of transactions per second with have to be extremely efficient, lightweight and lower energy cost. Proof-of-stake networks are.”
One such cryptocurrency project working to switch from the PoW to PoS mining model is Ethereum. The transition, known as “The Fusion,” should make it more environmentally friendly and will significantly reduce grid power costs. Last month, Ethereum lead developer Tim Beiko predicted that the change will see the light of day in a few months, after June 2022.
SBF did not completely reject bitcoin. He envisioned it to have a future as “an asset, a commodity, and a store of value” much like gold:
“I don’t think that means Bitcoin has to go.”
Sam Bankman-Fried, Source: The Financial Times
SBF is interested in Solana
Speaking of blockchain protocols using a proof-of-stake mining model, mention should be made of Solana, who seems to be among Bankman-Fried’s favorites as he often praises her merits.
In November 2021, the CEO emphasized Solana’s ability to scale millions of transactions per second. As such, it could become the next most dominant digital asset protocol, surpassing even Bitcoin and Ethereum.
In early 2022, the Solana network suffered an outage that caused panic among its users and traders throughout the crypto community. Despite the issue, SBF remained optimistic about it, ranking it better than other blockchains.
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This post FTX CEO believes that Bitcoin has no future as a payment system
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