FTX Founder Sam Bankman-Fried Thinks Bitcoin Has No Future as a Payments Network

Sam Bankman-fried

Sam Bankman-Fried, the founding father of the cryptocurrency alternate FTX, has given his take concerning the way forward for Bitcoin’s utilization. Bankman-Fried said he doesn’t imagine that Bitcoin will work as a funds community, as a result of its restricted functionality for scaling to satisfy this activity. However, he believes it’d turn into “an asset, a commodity, and a retailer of worth.”

Sam Bankman-Fried on Bitcoin as a Payments Network

FTX founder Sam Bankman-Fried has given his opinion about the place bitcoin goes and the actual worth of its construction sooner or later. In an interview revealed by the Financial Times, Bankman-Fried criticized the implementation of Bitcoin as a funds community. To him, the Bitcoin blockchain system won’t ever work as a day-to-day funds system for a number of causes.

A perceived lack of scalability of the Bitcoin blockchain is certainly one of them, and the second purpose offered by the manager has to do with the power and environmental implications of this hypothetical progress in comparison with different alternate options. To Bankman-Fried, bitcoin for funds is akin to gold, in that it might be impractical to make use of. He stated:

Why don’t we go to a retailer and pay with bodily gold bars? First of all, it might be ridiculous and absurd. It can be unbelievably costly. And I’m positive it’d be dangerous for the local weather.

He additionally declared that proof-of-stake (PoS) networks can be extra environment friendly to finish these duties, explaining:

Things that you simply’re doing hundreds of thousands of transactions a second with (will) should be extraordinarily environment friendly and light-weight and decrease power price. Proof of stake networks are.

Bankman-Fried believes that Bitcoin has different distinctive properties that make it good as “an asset, a commodity, and a retailer of worth.”

Differing Opinions

However, some views differ from Bankman-Fried’s opinions. The inception of the Bitcoin Lightning Network (LN), the second layer (L2) enlargement protocol for Bitcoin that proposes very low transaction prices, may be an answer to the scaling issues that first-generation blockchains like Bitcoin face when congested. This is the opinion of Paolo Ardoino, CTO of Bitfinex, who believes Lightning has the potential to show Bitcoin right into a possible cost rail. He said:

Bitcoin’s Lightning Network is quietly rising to make manifest Satoshi Nakamoto’s prophecy of a decentralized, peer-to-peer cost community. A living proof is El Salvador the place the nation’s adoption of bitcoin as authorized tender has made the nation a laboratory for Lightning utilization with international firms integrating the expertise.

David Marcus, former crypto chief at Meta, just lately launched Lightspark, a VC-backed firm that may discover the capabilities of the Lightning Network for funds.

The protocol, which was proposed in 2015, has nonetheless not managed to achieve mainstream assist, and it sits at quantity 32 on the listing of decentralized protocols with essentially the most worth locked, according to Defi Pulse, a decentralized finance index.

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