FTX chief said bitcoin has no future as a means of payment

According to Sam Bankman-Fried, the asset is inefficient and has high environmental costs

16.05.2022 - 08:45

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2 min

What’s new? Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, has criticized the use of bitcoin as a means of payment. In an interview for Financial Times, he listed the main drawbacks of the first cryptocurrency: inefficiency and high environmental costs.

News on the Financial Times website

What arguments did Bankman-Fried make? The bitcoin system of validating transactions is unable to scale and cope with the millions of transactions that would be required to make the cryptocurrency an effective means of payment. “The bitcoin network is not a payments network and it is not a scaling network,” Bankman-Fried added.

The 30-year-old billionaire also said that an alternative type of blockchain with a Proof-of-Stake (PoS) algorithm would be needed to create a functional crypto payments network. Using PoS would make transactions effective, easy, and less energy-intensive. Despite criticism of bitcoin, Bankman-Fried stressed that the asset has a place in the crypto market and a future as a store of value akin to gold.

What events happened before? Warren Buffett, the founder of Berkshire Hathaway, stated that he sees no value in the first cryptocurrency as it does not produce anything. In this, the billionaire noted that having some cryptocurrencies in the portfolio could provide an advantage if used for lending or as collateral.

What is known about FTX? It is a centralized cryptocurrency exchange for trading derivatives headquartered in the Bahamas. It was created in 2018 by trader Sam Bankman-Fried and programmer Gary Wang. As of 2022, the platform has more than one million registered users.

In 2022, Bankman-Fried was ranked as the second richest person in the crypto industry by Forbes. His fortune was estimated at $24 billion.

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