FTX CEO sees no future in Bitcoin payments, community fires back

Sam Bankman-Fried is the founder of crypto exchange FTX. He has criticized Bitcoin’s efficiency as a payment system, but was met with heavy criticism from the crypto community.

Bankman-Fried raised environmental concerns about the Bitcoin network’s mining consensus Proof-of-Work (PoW), and claimed that it is not scalable enough for millions of transactions.

He advocated the use of proof–of-stake (PoS), a mining consensus, and claimed that it was better suited to blockchain payment networks. He stated:

Things that are involved in millions of transactions per second must be efficient, lightweight, and cost-effective. Evidence of stake networks is.

The comments of Bankman-Fried echoed the recent calls for PoW to be banned by a group made up of billionaire lobbyists, including Ripple’s co-founder and other environmental groups. But, Bitcoin supporters have been actively resisting the ongoing narration calling to change the code of Bitcoin’s mining consensus.

Related: Want to Work: Bitcoin switching to proof-of stake remains unlikely

Jack Dorsey and others have made it clear that PoS has a more centralized and less secure system than PoW.

Recent comments by FTX CEO were not well received by the crypto community. Many claim that the Bitcoin network was not meant to be a payment network but a settlement network and layer-2 (L2) solution. This includes the Lightning Network. One user wrote:

“Either SBF, FT lies here. What happens to L2? The Bitcoin Lightning Network can handle up to 1,000,000 transactions every second!”

Others reminded him about the high centralization of PoS networks like Solana (SOL) and their concurrent shutdowns. One user wrote:

“Thanks to God we have Soylana so we can switch off every other week!”

Reddit user:

“He doesn’t know what he’s talking about (or the journalist interviewing his). Scaling is not related to consensus algorithms. Therefore, whether it is POW/POS is irrelevant to scaling issues.

To clear the air, the CEO of FTX took to Twitter to clarify his comments. He also mentioned the potential value of the Bitcoin network as a store-of-value. He stated:

To be clear, I also stated that it has potential to store value. Although the BTC network cannot support thousands/millions TPS, it can be xfered by lightning.

Last year, the PoW vs PoS debate began when the Ethereum network announced its plans to transition to the PoS mining consensus. Elon Musk and others fueled the belief that BTC must use more clean energy in order to be viable. In 2022, however, the discussion seems to have moved towards a total change in the mining consensus for BTC.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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