According to Sam Bankman-Fried, the CEO of the crypto exchange FTX, bitcoin will not become a worldwide payment network. Because of its proof-of-work mining methodology, he called it inefficient and damaging to the ecosystem. However, he does not feel that BTC must die since it might function as a store of wealth akin to gold.
PoS Should Be Used in Payment Systems
Sam Bankman-Fried (SBF) recently slammed bitcoin for not being able to handle a large number of transactions at a low cost. BTC, or any other digital currency based on the proof-of-work (POW) mining mechanism, in his opinion, has no future as a viable payment system, saying that the Bitcoin network is not a payment system or a scaling system.
SBF believes that employing a proof-of-stake (POS) consensus mechanism and blockchain technologies may construct a viable payment network. As a result, transactions will be speedier and less costly, making them a good alternative for the general public:
“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.”
Ethereum is one cryptocurrency project that aims to transition from a PoW to a PoS mining algorithm. The “Merge” transformation should make it more ecologically friendly and dramatically reduce the network’s energy expenses. In the previous month, Ethereum’s top developer, Tim Beiko, anticipated that the transition would happen in a few months after June 2022.
SBF did not fully reject Bitcoin. He saw it as an asset, commodity, and store of value in the same way as gold does:
“I don’t think that means bitcoin has to go.”
When it comes to blockchain protocols that use a proof-of-stake mining approach, one might include Solana, which seems to be a favorite of Bankman- Fried’s since he often praises its benefits.
The CEO stressed Solana’s capacity to expend millions of transactions per second in November 2021. As a result, it has the potential to overtake Bitcoin and Ethereum as the most popular digital asset system.
Solana’s network went down at the start of 2022, causing alarm among its users and dealers throughout the crypto industry. Despite the problem, SBF remained positive, rating it higher than other blockchains.