Sam Bankman-Fried caused a stir on social media following remarks on Bitcoin’s inability to efficiently support millions of transactions per second
He, however, believes the flagship cryptocurrency can serve as a store of value
FTX CEO Sam Bankman-Fried, earlier this week, weighed in on the Bitcoin utility discussion. The crypto entrepreneur remarked that the notion that Bitcoin could facilitate payments into the future is a flawed one. In a recent interview with Financial Times, Bankman-Fried explained that Bitcoin lacks the measure of scalability desired to achieve adoption as a payments network on a mass scale.
“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,” he said.
PoS in favour of PoW
Pulling into play the power usage concerns that have plagued Bitcoin due to its proof of work consensus mechanism, the FTX CEO pointed out that Bitcoin also holds the risk of even higher energy usage than mining consumes today.
“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.”
He, however, didn’t entirely dismiss the world’s leading digital asset by market capital. Particularly, he noted that Bitcoin could yet play the role of a store of value such as Gold. The FTX chief added that it could have user cases beyond this – referring to Bitcoin as an asset or commodity.
Predictably, SBF’s comments didn’t go down well with the Bitcoin faithful, who went on a rampage. Some responded to Bankman-Fried’s argument with reference to the Bitcoin Lightning Network that handles as many as 1 million transactions per second.
The FTX CEO had to come back and clarify his comments.
“To be clear I also said that it does have potential as a store of value. The BTC network can’t sustain thousands/millions of TPS, although BTC can be [referred] on lightning/ L2s/ etc,” he wrote in a later tweet.
The comments by the FTX CEO come hardly a month after the Central African Republic (CAR) became the second country to adopt Bitcoin for daily payments.