Bitcoin has no future as a payment network due to its inefficiency: FTX

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May 16, 2022 | 10:28 a.m.

The CEO and founder of the digital asset exchange FTX, Sam Bankman-friedconsiders that bitcoin It has no future as a payment network due to its inefficiency and high environmental costs.

Bankman-Fried, one of the most influential CEOs in cryptocurrencies, said that the proof-of-work system for validating transactions on the blockchain, which supports bitcoin, was not capable of scaling up to deal with the millions of transactions that would be needed to make cryptocurrency a effective means of payment.

The bitcoin network is not a payment network and it is not a scalable network.

pointed.

His comments came when the cryptocurrency market fast-growing market was hit by a sell-off that left bitcoin down more than 35% since January, its lowest level from the end of 2020.

Some enthusiasts of cryptocurrencies they still see cryptocurrency as a way to conduct everyday transactions.

countries like The Savior The US and the Central African Republic have adopted bitcoin as legal tender, but recent research by academics in the United States found that the currency has barely been used for daily payments in the Central American country, despite the implementation of bitcoin ATMs. and other measures to encourage their use.

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‘Alternative Blockchain’ Could Work As Crypto Payment Network

Sam Bankman-Fried, the 30-year-old billionaire, who has turned FTX on one of the world’s largest virtual asset exchanges, said an alternative type of block chain known as proof of stake or other technological innovations to create a functional network of crypto for bitcoin.

Ethereal has been working to move to a proof-of-stake system, which is intended to consume less power.

The things you’re doing millions of transactions per second with have to be extremely efficient, lightweight, and lower energy cost. Proof-of-stake networks are

Bankman-Fried said.

Bitcoin Causes Environmental Concerns

His criticism of bitcoin from the CEO of FTX underlined serious concerns on the amount of power needed to run proof-of-work cryptographic systems. Some European regulators have called for the systems to be banned due to their carbon emissions.

The bitcoin mining it consumes more energy than many countries, including Norway and Sweden, according to Cambridge University’s bitcoin electricity consumption index.

“It has to be the case that we don’t ramp this up to the point where we eventually spend 100 times what we spend today on energy costs for mining,” Bankman-Fried said.

FTX has used carbon offsets to balance the company’s emissions, which according to Bankman-fried it was worth it, but it is not a complete solution, since he considers that at some point things will end to compensate.

Also read: Bitcoin marks weekly losing streak not seen since 2014 after ‘stablecoin’ crash

Despite his views on bitcoin, Bankman-Fried said he still believed the digital asset largest in the world had a place in the crypto market.

“I don’t think that means bitcoin has to go away,” he said, adding that the token may still have a future as an asset, a commodity and a store of value similar to gold.

With information from the Financial Times

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