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Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, gave his opinion on the future use of bitcoin. Bankman-Fried stated that he does not believe bitcoin will work as a payment network because of its limited ability to scale to do so. However, he believes it can 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 opinion on where bitcoin is headed and the real value of its structure in the future. In an interview published by the Financial Times, Bankman-Fried criticized the introduction of bitcoin as a payment network. In his opinion, the bitcoin blockchain system will never work as an everyday payment system for several reasons.
One is the perceived lack of scalability of the bitcoin blockchain, and the second reason presented by the executive relates to the energy and environmental implications of this hypothetical growth compared to other alternatives. According to Bankman-Fried, bitcoin for payments is akin to gold in the sense that its use would be impractical. He stated:
Why don’t we go to the store and pay with physical gold bullion? First of all, that would be ridiculous and absurd. It would be incredibly expensive. And I’m sure it would be bad for the climate.
He also stated that Proof of Share (PoS) networks would be more efficient for these tasks, explaining:
The things with which you do millions of transactions per second (should be extremely efficient, easy, and with less energy). Networks with share proofs are.
Bankman-Fried believes bitcoin has other unique properties that make it a good “asset, commodity, and store of value.”
However, some opinions differ from Bankman-Fried’s. The creation of the Bitcoin Lightning Network (LN), a second-level (L2) extension protocol for Bitcoin that offers very low transaction costs, could be a solution to the scaling problems that first-generation blockchains like Bitcoin face when they are overloaded. So says Paolo Ardoyno, Bitfinex CTO, who believes Lightning has the potential to turn bitcoin into a real payment bus. He stated:
The Bitcoin Lightning Network is quietly emerging to fulfill Satoshi Nakamoto’s prophecy of a decentralized, peer-to-peer payment network. Case in point is El Salvador, where the adoption of bitcoin as legal tender has turned the country into a Lightning laboratory with global corporations integrating the technology.
David Marcus, former head of Meta’s cryptocurrency division, recently launched Lightspark, a venture-backed company that will explore Lightning’s payment capabilities.
The protocol, which was proposed in 2015, has so far failed to gain mainstream support and ranks 32nd on the list of decentralized protocols with the highest blockchain costs, according to Defi Pulse, an index of decentralized finance.
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