Bitcoin Has No Future as a Payment Network, FTX CEO


The crypto billionaire, creator, and CEO of FTX, a cryptocurrency exchange that is already competing against Binance, has a clear opinion on the future of Bitcoin, denying that it will become a means of payment as Satoshi Nakamoto devised.

Sam Bankman-Fried (SBF), CEO of FTX, has declared in an interview with the Financial Times that “Bitcoin has no future as a payment network” due to its mining structure using the Bitcoin protocol. proof-of-work (PoW) that harms the environment, according to the crypto millionaire.

According to the CEO of FTX, the mining consensus protocol should be proof-of-stake (PoS) in order to be used en masse. According to SBF, PoS represents the next step in the evolution of cryptocurrencies because the networks would be cheaper and would not require as much energy.

Bankman-Fried also cited that he did not believe that Bitcoin had to disappear as a cryptocurrency, having a future as "an asset, a commodity and a store of value" similar to the role of gold.

Lightning Network as salvation?

Bitcoin was created by Satoshi Nakamoto in order to become a means of payment without intermediaries.

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The problem that all cryptocurrency networks suffer is supporting the demand when they become popular, in short, the system is scalable. Because many investors view Bitcoin as a haven or inflation asset, there is a lot of activity on the payment network not directly related to person-to-person payments. This fact causes the network to be saturated with traffic and therefore the fees to use the Bitcoin blockchain are sometimes expensive.

Lightning Network creates an outer layer 2 of the main blockchain where payments between people or a company take place in an alternative network, so that the data is later released to layer 1 in a single transfer, in this way the saturation would be reduced considerably. and with it the fees for the use of the Bitcoin blockchain.

This solution aims to attack the scalability problem, it is currently breaking record after record in adoption. Bitcoin mining is currently a contentious issue as there are very polarized opinions both for and against it.

Ethereum versus Bitcoin: PoS versus PoW

PoS cryptocurrencies use the redemption of users' tokens or cryptocurrencies to ensure the security of the protocol.

In contrast, PoW uses the computational strength of the miners as a security wall for the protocol. PoW miners require extensive hardware equipment, which needs a lot of energy in electrical format to solve some formulas to obtain BTC in exchange for their computational force. PoS does not require this expense in energy or equipment, although it remains to be tested if it is as safe as PoW, which has proven to be solid in this matter.

The two best-known blockchain projects in the crypto market, Bitcoin and Ethereum, currently use PoW for their mining as well as for the security of their protocols.

However, Ethereum has concrete plans to change its mining protocol to PoS as well as other aspects to become the so-called Ethereum 2.0. Changing the consensus protocol from PoW to PoS is a notorious change that could also attract the attention of present and future investors, since anyone could mine with their assets, introducing a system similar to that of dividends where the end-user would obtain a return for parking your wealth by staking.

The activity in Ethereum 2.0 and its staking continues to grow, its protocol is being built at a snail's pace due to several delays in its development, however, it is better to make these changes safely as the stakes are high.

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