Satoshi Nakamoto created Bitcoin (BTC) to serve as a decentralized alternative to the traditional financial system. But FTX CEO Sam Bankman-Fried recently said that he doesn’t see any future for Bitcoin as a payments network.
Speaking to Financial Times, the FTX chief said that his thoughts rely on the Bitcoin network’s “inefficiency and high environmental costs”. He added that Bitcoin’s Proof-of-Work (PoW) blockchain that validates transactions isn’t capable to scale enough to address the transactions of millions of users worldwide.
“The Bitcoin network is not a payments network and it is not a scaling network,” he said. Thus, he believes that BTC isn’t an effective means of payment. Sam Bankman-Fried isn’t alone in the crypto space to think like this. Many crypto market enthusiasts agree that Bitcoin (BTC) serves a better purpose as a store of value rather than as a means of payment.
However, there are some countries seeing a huge hope in Bitcoin as a means of payment. Two countries – El Salvador and the Central African Republic have already made Bitcoin a legal tender.
Bitcoin Adoption Really on the Rise?
Although the two countries have adopted Bitcoin as a legal payment method, the adoption isn’t much. Recent research by American academics shows that Bitcoin has been rarely used for payments in El Salvador.
The FTX chief said that an alternative blockchain that runs on Proof-of-Stake is required to create a functional payments network. We already know that Ethereum has been working on this transition for now. Sam Bankman-Fried said:
“Things that you’re doing millions of transactions a second with have to be extremely efficient and lightweight and lower energy cost. Proof of stake networks are.
It has to be the case that we don’t scale this up to the point where we’re spending 100 times as much eventually as we are today on energy costs for mining,”
Bitcoin’s Proof-of-Work network has been one of the key reasons for objection by crypto enthusiasts. However, the Bitcoin mining industry is making all efforts to migrate to renewable and green energy solutions.
But the FTX chief believes that Bitcoin is here to stay. “I don’t think that means Bitcoin has to go,” he said, adding that the token may still have a future as “an asset, a commodity and a store of value”.
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