FTX CEO sees no future in Bitcoin payments, community shoots back

Sam Bankman-Fried, the founder of crypto exchange FTX, has criticized Bitcoin (BTC)’s efficiency as a payment network, only to deal with heavy setbacks from the crypto community.

During an interview with the Financial Times, Bankman-Fried fueled environmental concerns related to the Bitcoin network’s mining consensus, proof-of-work (PoW), claiming it is not scalable enough to handle millions of transactions.

He instead advocated the use of proof-of-stake mining consensus, arguing that it is better suited for blockchain payment networks. He said:

“Things that do millions of transactions per second have to be extremely efficient, lightweight and reduce energy costs. Evidence of ring networks.”

Bankman-Fried’s comments resonated with recent calls for a complete ban on PoW by a group of billionaire lobbyists made up of the co-founder of Ripple and several other environmental groups. However, Bitcoin proponents have been actively fighting the ongoing narrative calling for a change in the code of the Bitcoin network’s mining consensus.

Related: Excited to Work: Bitcoin Switch to Proof-of-Stake Remains Unlikely

People like Jack Dorsey have already made it clear that PoS is more centralized and less secure than PoW.

The crypto community was not very happy with the recent comments from FTX CEO. Many have argued that the Bitcoin network is not intended as a payment network, but rather a settlement network and layer-2 solutions such as the Lightning Network act as the main payment gateway. One user wrote:

“Either SBF or FT is here. What will happen to L2 (Lightning Network)? The Bitcoin Lightning Network processes up to 1,000,000 transactions per second!”

Others reminded him of the high centralization and simultaneous shutdowns of PoS networks like Solana. An user wrote†

“Thank goodness we have Soylana that we can turn on and off every other week!”

Another user on Reddit wrote:

“He has no clue what he’s talking about (or the journalist interviewing him doesn’t). Scaling has NOTHING to do with the consensus algorithm and so whether it’s POW or POS is completely irrelevant to the scaling issues.”

The FTX CEO himself took to Twitter to clear the air around his comments and said he also spoke about the Bitcoin network’s potential as a store of value. He said:

“Just to be clear, I also said it has potential as a store of value. The BTC network cannot handle thousands/millions of TPS, although BTC can be delivered at lightning speed.”

The PoW vs PoS debate started last year when the Ethereum network outlined its plan to move to the PoS mining consensus. People like Elon Musk fueled the sentiment that BTC needs to use more clean energy to be a viable option. By 2022, however, the debate seems to have shifted to a complete change of mining consensus for the BTC network.