FTX CEO Sam Bankman-Fried Criticizes Bitcoin as a Payments Network

• The most popular cryptocurrency uses a lot of energy.
• The number of machines involved in Bitcoin mining has constantly increased.

According to FTX CEO Sam Bankman-Fried, Bitcoin is not an acceptable payment network. On Monday, he told the Financial Times that “The Bitcoin network is not a payments network and it is not a scaling network.” Bitcoin transactions are validated using a consensus mechanism known as Proof of Work (PoW), which Bankman-Fried pointed out.

Environmental Concerns

Computers operate nonstop to validate transactions and produce new blocks in a PoW-based network. This is known as mining. The number of machines involved in Bitcoin mining has constantly increased as the industry has matured. As a result of this development, environmentalists and policymakers seeking to meet their climate change targets have expressed alarm about the amount of energy Bitcoin requires to sustain itself.

The most popular cryptocurrency uses a lot of energy, but it also moves quite slowly. According to statistics retrieved from Blockchain.com, the average number of Bitcoin transactions per second (TPS) during the last 30 days is around 2.58. Compared to well-established payment systems like Visa and MasterCard, Bitcoin is a tenth of the speed. Bankman-Fried, on the other hand, believes that Bitcoin may be used for a more critical function.

In reference to the Financial Times, “To be clear I also said that it does have potential as a store of value,” he tweeted. However, the future of cryptocurrencies is not doomed. It’s better to use PoS crypto networks instead, said FTX’s CEO, since they provide low transaction prices and fast transaction speeds essential to any payment system.