Bitcoin is too inefficient. Not just anyone says that, but one of the biggest tech nerds on the planet, Sam Bankman-Fried (30). He founded the crypto exchange FTX, the world’s third largest crypto trading platform.
“Bitcoin is not a payment network and it is not a scalable network,” says Bankman-Fried in the “Financial Times”. Processing millions of payments reliably, energy-efficiently and within a very short time – the Bitcoin blockchain system is not capable of this.
Hardly used, although legitimate by law
His statement hits Bitcoin investors at a particularly difficult time. Bitcoin price is at its lowest level since 2020. Compared to November 2021, the most well-known of all cryptocurrencies is now only worth half as much.
However, some crypto fans still see Bitcoin as a way to carry out everyday transactions. In some countries, Bitcoin is accepted as legal tender, for example in El Salvador or the Central African Republic.
Too energy intensive
US scientists have examined how deeply embedded cryptocurrency is in these economies. The result: Despite the introduction of Bitcoin ATMs and other incentives, bitcoins are rarely used for everyday payments.
Bankman-Fried sees the big problem with the cryptocurrency in the so-called “Proof of Work”, i.e. in the validation of blockchain transactions. This is simply too energy intensive.
Bitcoin – the new gold
Bitcoin mining uses more energy than many countries, including Norway and Sweden, according to Cambridge University’s Bitcoin Electricity Consumption Index. And there are other digital coins based on a more efficient blockchain, for example Ethereum.
Despite this, Bankman-Fried says the world’s largest digital asset has a place in the crypto market. “I don’t think bitcoin has to go away,” he says. The token still has a future as an asset, “a commodity and a store of value.” Similar to gold – but not like a conventional currency. (gif)
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