Bitcoin (BTC) is doomed, says Sam Bankman-Fried, CEO and founder of cryptocurrency exchange FTX. In an interview, the billionaire estimated that the queen of cryptocurrencies will not be able to establish itself as a real means of payment.
Bitcoin, the first of the cryptocurrencies on the market, is often presented as the currency of the future by its supporters. Advocates believe that digital currency will gradually replace fiat currencies, such as the euro and the dollar, in the age of instant exchanges through the internet. Several countries have also chosen to make Bitcoin their national currency. This is the case of El Salvador and the Central African Republic.
Unsurprisingly, many people criticize this thesis and claim that Bitcoin is not an efficient means of payment, in particular because of its very volatile value. In recent years, bankers, central bankers and politicians have issued harsh criticism against the dean of cryptocurrencies. Critics also come from some individuals involved in the world of digital assets.
This CEO of the cryptocurrency world does not believe in the future of Bitcoin
During an interview with our colleagues from the Financial Times, Sam Bankman-Fried, CEO and founder of cryptocurrency exchange FTX, didn’t mince words about the Bitcoin king. The billionaire, whose exchange is growing, believes that the “Bitcoin has no future as a payment network due to its inefficiency and high environmental costs”.
Sam Bankman-Fried points first the Proof of work, or Proof of work. This is the process of securing transactions recorded on the blockchain. This protocol is responsible for the inviolability and resilience of the Bitcoin network. Very secure, the network suffers from an alleged inability to “cope with the millions of transactions that would be required to make the crypto token an efficient means of payment”, stresses the Financial Times.
“The Bitcoin network is not a payment network and it is not a scaling network”, summarizes Sam Bankman-Fried. However, several overlays of the Bitcoin network, such as the Lightning Network, have been developed to facilitate large-scale exchanges. It is this solution that was chosen by El Salvador, the first country to adopt BTC as its national currency.
The founder of FTX also regrets that the Proof of Work is considerably energy-intensive. According to an analysis by The New York Times, the Bitcoin network consumes 91 terawatt hours of electricity per year, or 0.5% of global electricity consumption. To secure blockchain transactions, mining farms rely on powerful computing computers, the Asics, which run continuously. Many environmental NGOs, such as Greenpeace, are also demanding that Bitcoin abandon proof of work.
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FTX CEO Recommends Other Cryptocurrencies Instead
To develop an efficient and functional payment network, Sam Bankman-Fried prefers Proof of Stake cryptocurrenciessuch as Ethereum in the near future, or on other protocols. “Things with which you perform millions of transactions per second must be extremely efficient and light and at a lower energy cost. Networks based on Proof of Stake are”explains Sam Bankman-Fried. “There will come a time until the point where we are spending 100 times more than we are today on energy costs for mining” warns the CEO of FTX.
Sam Bankman-Fried’s interview sparked outrage on social media. On Twitter, the billionaire wanted to qualify the remarks reported by the Financial Times. The founder of FTX clarified that “the BTC network cannot support thousands/millions of transactions, although BTC can be transferred over overlays like the Lightning Network”. He adds : “to be clear, I also said it has potential as a store of value”. In the Financial Times article, Sam Bankman-Fried emphasizes that Bitcoin’s flaws should not lead to its abandonment.“I don’t think that means Bitcoin has to go”says the 30-year-old billionaire.
Source : FinancialTimes