Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, has given his take regarding the future of Bitcoin’s usage. Bankman-Fried stated he doesn’t believe that Bitcoin will work as a payments network, due to its limited capability for scaling to fulfill this task. However, he believes it might become “an asset, a commodity, and a store of value.”
Sam Bankman-Fried on Bitcoin as a payment network
FTX Founder Sam Bankman-Fried gave his thoughts on where bitcoin is headed and what its structure is really worth in the future. In an interview published by the Financial Times, Bankman-Fried criticized Bitcoin’s implementation as a payment network. For him, the Bitcoin blockchain system will never work as an overnight payment system for several reasons.
A perceived lack of scalability of the Bitcoin blockchain is one of them, and the second reason presented by the executive has to do with the energy and environmental implications of this hypothetical growth compared to other alternatives. To Bankman-Fried, bitcoin for payments is akin to gold, in that it would be impractical to use. He stated:
Why not go to a store and pay with physical gold bars? First of all, that would be ridiculous and absurd. It would be incredibly expensive. And I’m sure that would be bad for the climate.
He also declared that proof-of-stake (PoS) networks would be more efficient to complete these tasks, explaining:
Things with which you perform millions of transactions per second (will have to) be extremely efficient and light and energy efficient. Proof of stake networks are.
Bankman-Fried believes that Bitcoin has other unique properties that make it good as “an asset, a commodity, and a store of value.”
Differing opinions
However, some views differ from Bankman-Fried’s opinions. The creation of the Bitcoin Lightning Network (LN), the second layer (L2) extension protocol for Bitcoin that offers very low transaction costs, could be a solution to the scaling problems faced by first-generation blockchains. like Bitcoin face when crowded. That’s the opinion of Paolo Ardoino, CTO of Bitfinex, who believes that Lightning has the potential to turn Bitcoin into a workable payment rail. He stated:
Bitcoin’s Lightning Network is quietly emerging to make manifest Satoshi Nakamoto’s prophecy of a decentralized, peer-to-peer payment network. A case in point is El Salvador where the country’s adoption of bitcoin as legal tender has made the nation a laboratory for Lightning usage with global corporations integrating the technology.
David Marcus, former head of crypto at Meta, recently launched Lightspark, a VC-backed company that will explore the capabilities of the Lightning Network for payments.
The protocol, which was proposed in 2015, has still not managed to gain mainstream support, and it sits at number 32 on the list of decentralized protocols with the most value locked, according to Defi Pulse, a decentralized finance index.
