FTX CEO says Bitcoin cannot be a successful payment system - Robotics Online


FTX CEO says Bitcoin cannot be a successful payment system

24 May 2022

  • The FTX CEO has said that Bitcoin cannot be used as a successful payment method
  • The executive said that Bitcoin had the potential to be used as a store of value like gold
  • Bankman-Fried has previously praised Solana over its merits

The CEO of the FTX cryptocurrency exchange, Sam Bankman-Fried, has said that Bitcoin cannot become a global payments network. The executive also added that while Bitcoin was not a perfect fit for payments, it could still be used as a store of value like gold.

FTX CEO says Bitcoin cannot be used for payments

Bankman-Fried said that the Bitcoin network was not efficient, adding that it caused harm to the environment because of using the proof-of-work consensus. However, he added that Bitcoin served the same purpose as gold in being a store of value.

Bankman-Fried recently held an interview with Financial Times, saying that the Bitcoin network could not process large transactions at a low cost. He said that all cryptocurrencies that used a PoW consensus did not have a long-term future in being an effective payment system.

According to Bankman-Fried, the only blockchain network and token that had a future as a payments network was the one that used a proof-of-stake consensus. Transactions based on PoS networks are generally faster and less expensive, making them preferable to society.

“Things that you’re doing millions of transactions a second with have to be extremely efficient and lightweight and lower energy cost. Proof-of-stake networks are,” Bankman-Fried said.

For instance, Ethereum plans to switch from a PoW consensus to a PoS consensus. The network is currently awaiting the completion of “The Merge” process that will make the Ethereum network environmentally friendly and lower the amount of energy needed to validate and process transactions on the network.

Tim Beiko, a leading developer on the Ethereum network, announced that the shift to a PoW consensus would happen shortly after June 2022. While the FTX CEO did not dismiss Bitcoin entirely, he said that the asset had a future as “an asset commodity and a store of value”, just like gold.

FTX CEO believes in Solana

While the Bitcoin network has been criticized for its lack of energy efficiency, it has been touted by those who believe it is a safe investment in the sector due to being decentralized and its security guaranteed by PoW.

However, networks that use other efficient consensus models are becoming highly popular, and Bankman-Fried is particularly interested in Solana. Solana uses a proof-of-history model, and the FTX CEO has mentioned some of the benefits of this blockchain.

Solana is believed to be the fastest blockchain network, with the ability to process 60,000 transactions per second. In November 2021, the FTX CEO said Solana’s fast speeds were an appealing trait. Therefore, the network had the potential to dominate the digital asset sector and even surpass Bitcoin and Ethereum market cap.

This year, Solana has suffered several outages that have forced the network validators to restart the network. The outages triggered panic amongst traders and users. However, Bankman-Fried has remained bullish on the project despite these issues, and he still classifies it as a better option than other blockchains.
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