TL;DR: Sam Bankman-Fried said that he doesn’t believe Bitcoin can work as a payments network, criticizing the high energy costs of its proof-of-work algorithm and claiming it can’t sustain millions of transactions per second. He does, however, think that it has potential as a store of value.
In a Monday interview, crypto billionaire Sam Bankman-Fried said that he doesn’t see a future for Bitcoin as a payments network. Bankman-Fried is the founder and CEO of FTX, one of the most popular cryptocurrency exchanges in the world.
The thirty-year-old billionaire criticized Bitcoin’s underlying proof-of-work system, used to verify transactions, for its high environmental costs and inefficiency. He argued that the network isn’t capable of handling millions of transactions per second. However, he did mention that users can transfer Bitcoin to layer two payment protocols such as Lightning. He also noted that proof-of-stake networks solve these issues.
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 xfered on lightning/L2s/etc. https://t.co/7ghQzz7eXa
— SBF (@SBF_FTX) May 16, 2022
Switching Bitcoin over to a proof-of-stake algorithm would be no easy feat. As a reminder, Ethereum developers have been planning a shift to PoS for several years, although it’s been met with several delays.
While Bankman-Fried doesn’t believe in Bitcoin as a viable currency for payments, he did mention that it has potential as an asset, a commodity, and a store of value, similar to gold.
Last week, the entire crypto market saw a massive crash after stablecoin Terra collapsed. Bitcoin has recovered slightly since then but is still down over 50 percent since its peak in November.