Founder of crypto exchange FTX says Bitcoin has no future as a payments network
FTX founder Sam Bankman-Fried said that proof-of-stake blockchains would be better suited for payment requirements, but that Bitcoin still has a place in the cryptoverse.
cryptocurrency exchange founder and chief executive Sam Bankman-Fried said he believes that Bitcoin and other proof-of-work networks have no future as payments networks. Currently, the two largest tokens by market capitalisation, Bitcoin and Ethereum, are both run on proof-of-work blockchains.
Speaking to Financial Times, Sam said that tokens that rely on the proof-of-work network are inefficient, and have a high environmental cost due to the energy demands required to run the blockchain. Bitcoin has been in the news for years for drawing more energy to run than several nations.
The FTX founder, instead, suggested the proof-of-stake method for payments networks as they can be cheaper and less power-hungry. Ethereum, which was built on a proof-of-work blockchain, has been working to switch over to the more efficient proof-of-stake technology for similar reasons.
Sam, however, believes that Bitcoin still has a place in crypto ecosystem as "an asset, a commodity and a store of value" similar to gold. Bitcoin's tumble to a six-month low as well as the recent Terra and coin crashes have had investors nervous.
Sam launched FTX in 2019, and the company has come to be valued at $32 billion as of the latest funding round in February 2022. The founder himself is now worth around $21 billion, according to Forbes.
Edited by Affirunisa Kankudti