FTX CEO sees no future for bitcoin payments, community fights back

Sam Bankman-Fried, founder of cryptocurrency exchange FTX, criticized Bitcoin’s efficiency (bitcoin) as a payment network, but was strongly opposed by the crypto community.

period interview Bankman-Fried raised environmental concerns with Bitcoin network mining consensus, proof-of-work (PoW), in a FT report, claiming that it is not scalable enough to hold millions of transactions.

He advocates the use of proof-of-stake mining consensus and claims that it is more suitable for blockchain payment networks. He said:

“Things that do millions of transactions per second have to be extremely efficient, lightweight, and have lower energy costs. Proof-of-stake networks are.”

Bankman-Fried’s comments resonated with a group of people who recently called for a complete ban on PoW. Billionaire lobbyist including Ripple co-founder and several other environmental groups. However, Bitcoin proponents have been actively opposing the ongoing call to change the narrative of the Bitcoin network’s mining consensus code.

related: Hungry for work: Bitcoin unlikely to move to proof-of-stake

The likes of Jack Dorsey have made it clear that PoS is more centralized and less secure than PoW.

The crypto community is not very pleased with the recent comments of the FTX CEO. Many claim that the Bitcoin network is not designed to be a payment network, but rather a means of settlement, with Layer 2 solutions like Lightning Network acting as the primary payment gateway. One user wrote:

“Both SBF or FT are lying here. What happens to L2 (Lightning Network)? Bitcoin Lightning Network processes up to 1,000,000 transactions per second!”

Others reminded him of the high centralization and concurrent shutdown of PoS networks like Solana.a user wrote:

“Thank God we have Soylana and we can close and open every other week!”

Another user on Reddit wrote:

“He has no idea what he’s talking about (or the reporter who interviewed him didn’t). Scaling has nothing to do with the consensus algorithm, so whether it’s POW or POS is completely irrelevant to the scaling issue.”

The FTX CEO personally clarified his comments on Twitter, saying that he also spoke about the potential of the Bitcoin network as a store of value. He said:

“To be clear, I also said it does have potential as a store of value. The BTC network cannot sustain thousands/millions of TPS, although BTC can be transferred via lightning.”

The PoW vs PoS debate started last year when the Ethereum network outlined its plans to move to PoS mining consensus. Elon Musk and others have fueled sentiment that BTC needs to use more clean energy to be a viable option. In 2022, however, the debate appears to have turned to a radical change in the mining consensus of the BTC network.