- FTX chief said that the PoW Bitcoin network cannot offer enough scalability to millions of users across the world for transacting frequently.
- Sam Bank Fried also cited some environmental concerns for Bitcoin. If not as a payment method, Bitcoin can still be a “store-of-value” he said.
Sam Bankman-Fried, the cryptocurrency billionaire and CEO of crypto exchange FTX thinks that Bitcoin has no future as a payments methods. His recent comments came while speaking to Financial Times wherein he also spoke about Bitcoin’s network inefficiency and high environmental costs.
One of the biggest issues the FTX chief finds about Bitcoin is the inability to scale. He adds that the Proof-of-Work algorithm underpinning the Bitcoin blockchain isn’t capable enough to handle millions of transactions. “The Bitcoin network is not a payments network and it is not a scaling network,” said the FTX chief.
Sam Bankman-Fried is one of the leading voices in crypto being a billionaire just at the age of 30. He has successfully expanded the FTX crypto exchanges into being one of the world’s largest crypto trading platforms.
He believes that a Proof-of-Stake (PoS) network is essential to creating a functional cryptocurrency payments network. This is exactly what the Ethereum blockchain has been working on. Ethereum developers will also release ‘The Merge’ upgrade a few months from now as a transition to the PoS network. Bankman-Fried said;
Things that you’re doing millions of transactions a second will have to be extremely efficient and lightweight and lower energy cost. Proof of stake networks are,
Bitcoin Adoption and Environmental Costs
While the FTX chief has this view, some countries are already gearing up for Bitcoin adoption. Over the last year, two countries – El Salvador and the Central African Republic – have made Bitcoin a legal tender. However, recent research by American academics shows that El Salvadorians are rarely using Bitcoin for daily payments.
This is despite the country launching several Bitcoin ATMs and taking other measures to encourage its use. But El Salvador continues to buy the Bitcoin dips and add BTC to their reserves.
Sam Bankman-Fried also raised the environmental concerns surrounding Bitcoin (BTC). He talked about the massive energy requirements to run the Proof-of-Work Bitcoin network. The Bitcoin network consumes more energy than several countries do. He added:
It has to be the case that we don’t scale this up to the point where we’re spending 100 times as much eventually as we are today on energy costs for mining.
The FTX chief said that his company uses carbon offsets to compensate for the emission. But he also added that this is not a complete solution “because you just run out of things to offset at some point”.
This doesn’t mean that the FTX Chief thinks that Bitcoin has no place in the crypto space. “I don’t think that means Bitcoin has to go,” he said. Instead, Sam Bankman-Fried sees Bitcoin as “an asset, a commodity and a store of value” similar to Gold.
Bitcoin struggling At $30,000
The recent comments from the FTX chief came when Bitcoin has been entered a steep correcting and struggling to hold the $30,000 support levels. As of press time, Bitcoin is trading at $29,557 levels with a market cap of $578 billion. As we explained, if Bitcoin breaks under the critical levels of $28,000-$29,000 we can see it heading to $22,000 all the way.