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FTX Chief Sam Bankman-Fried believes Bitcoin is not a reliable payments system

TL;DR Breakdown
  • Sam Bankman-Fried, CEO of the fast-growing crypto exchange FTX, said that Bitcoin is a poor choice of a payments network. 
  • He supported his remarks by pointing to the network’s proof-of-work (PoW) consensus algorithm, which validates Bitcoin transactions.

FTX CEO Sam Bankman-Fried believes that Bitcoin has no future as means of payment.  Bankman-Fried says Bitcoin’s Proof-of-Work network is not suitable for payments. He thinks it is slow and expensive to send transactions, making it a poor choice for everyday transactions.

Bitcoin can only process about seven transactions per second. This means it takes a long time to confirm each payment. In addition, this network has high overheads, which makes it expensive for the average person to use Bitcoin as a payment method.

Bankman-Fried says that Bitcoin’s PoW blockchain is not capable of scaling enough to address the transactions of millions of users worldwide. He adds that it is not a payments network, and it is not a scaling network.

According to Bankman-Fried, people trust the underlying technology behind Bitcoin, and it lacks scalability. He believes the two reasons are the top issues why bitcoin has failed so far as a currency. He also said that bitcoin still faces regulatory issues.

Sam Bankman-Fried, who is also the founder and CEO of Orchid Protocol and co-founder of Chain Inc., said that Bitcoin is definitely growing in popularity. However, he notes that the biggest issue with Bitcoin right now is that it is high cost.

He added that people cannot depend on a currency that a handful can only use because it is expensive.

Some analysts also say that the current Bitcoin blockchain creates an enormous amount of waste and requires tremendous amounts of energy, making it unsuitable for mass adoption.

Bitcoin is controversial

Bitcoin is a digital currency that allows people to send and receive money online, but it has also been used for payments in retail stores. The digital currency has been criticized for being slow to adopt because of its high transaction fees. 

However, the number of transactions has increased by more than 30% over the past year. The number of merchants accepting Bitcoin is also multiplying, boosting its use as a payment method in brick-and-mortar stores.

Bitcoin’s proof-of-work network is also called Nakamoto consensus, named after its creator Satoshi Nakamoto (who may be a group of people). This consensus mechanism is what makes it possible for all participants on the Bitcoin network to agree upon one history of transactions that haven’t been modified since its inception.

Bitcoin is a cryptocurrency that has been around since 2009. It was initially created as a store of value and a way to make payments over the internet, but it has suffered from scalability problems and high transaction fees.

The leading currency has faced a lot of controversies. Some people think that Bitcoin is too volatile to be used as an everyday currency, and others believe that if you’re not careful, you could lose all of your money by investing in it.

Bankman believes Bitcoin should compete with gold

Bitcoin is growing fast. Its price has increased by more than 300% in the last six months. Many people are asking themselves: “What’s behind this growth?”

The answer is simple—Bitcoin adoption is on the rise. More merchants are accepting Bitcoin payments than ever before, and there are now more than 30 million transactions per day on the network.

But there’s another critical question to ask: “How well does Bitcoin work right now?” Many experts believe that Bitcoin’s Proof-of-Work system is not good enough to allow it to scale up to meet demand in its current form.

Bankman-Fried holds that Bitcoin will serve as a store of value in the future, competing with gold. He believes an alternative blockchain that runs on Proof-of-Stake is needed. Bankman- Fried adds that an alternative to creating a functional payments network worldwide will be a plus.

Nellius Irene

Nellius Irene

Nellius Irene is a cryptocurrency investor and journalist who has been in the nascent space since 2018. She has researched and written on several crypto-related topics including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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