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FTX CEO sees no future in bitcoin payments, community shoots back

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Sam Bankman-Fried, the founder of crypto exchange FTX, has criticized Bitcoin’s (BTC) efficiency as a payments network, only to face fierce backlash from the crypto community.

During an interview with the Financial Times, Bankman-Fried raised environmental concerns related to the Bitcoin network’s mining consensus, Proof-of-Work (PoW), claiming it wasn’t scalable enough to handle millions of transactions.

He advocated using proof-of-stake mining consensus instead, claiming it was better suited to blockchain payment networks. He said:

“Things that you use to do millions of transactions per second need to be extremely efficient, light weight and reduce energy costs. Proof-of-stake networks are.”

Bankman-Fried’s comments coincided with recent calls for a total ban on PoW by a group of billionaire lobbyists that include Ripple’s co-founder and several other environmental groups. However, Bitcoin proponents have actively fought against the ongoing narrative calling for a change in the code of the Bitcoin network’s mining consensus.

Related: Eager to Work: Bitcoin Shift to Proof-of-Stake Remains Unlikely

People like Jack Dorsey have already made it clear that PoS is more centralized and less secure than PoW.

The crypto community was not very happy with the FTX CEO’s recent comments. Many claimed that the Bitcoin network is not a payment network, but rather a settlement network, and that Layer 2 solutions like the Lightning Network act as the main payment gateway. A user wrote:

“Either SBF or FT are here. What will happen to L2 (Lightning Network)? The Bitcoin Lightning Network processes up to 1,000,000 transactions per second!”

Others reminded him of heavy centralization and simultaneous shutdown of PoS networks like Solana. A user wrote:

“Thank god we have Soylana to turn off and on every other week!”

Another user on Reddit wrote:

“He doesn’t have a damn clue what he’s talking about (or the journalist interviewing him doesn’t). Scaling has NOTHING to do with the consensus algorithm, and so whether it’s POW or POS is totally irrelevant to the scaling issues.”

Taking to Twitter himself to clarify his comments, the FTX CEO said he also spoke about the potential of the Bitcoin network as a store of value. He said:

“To be clear, I also said that it has potential as a store of value. The BTC network cannot sustain thousands/millions of TPS, although BTC can be transferred to lightning.”

The PoW vs. PoS debate started last year when the Ethereum network outlined its plan to move to the PoS mining consensus. People like Elon Musk have fueled the feeling that BTC needs to use more clean energy to be a viable option. However, in 2022, the debate appears to have shifted towards a complete change in the mining consensus for the BTC network.