The founder of cryptocurrency exchange FTX has said bitcoin has no future as a payment network and criticized the digital currency for its inefficiency and high environmental costs, the Financial Times reported Monday.
Bitcoin, the world’s largest cryptocurrency, is created through a process called “proof of work” that requires computers to “mine” the currency by solving complex puzzles. Large amounts of electricity are required to power these computers.
An alternative to the system is called the “proof of stake” network, where participants can purchase tokens to join the network. The more tokens they own, the more they can mine.
FTX founder and Chief Executive Sam Bankman-Fried told FT that “proof of stake” networks would be necessary to develop crypto as a payment network because they are cheaper and consume less energy.
Blockchain Ethereum, which houses the second largest cryptocurrency ether, has been working on the move to this energy-intensive network.
Bankman-Fried also said he didn’t believe bitcoin should go as a cryptocurrency, and that it could still have a future as “an asset, a commodity and a store of value” like gold, the report said.
Bitcoin hit its lowest since December 2020 last week following the collapse of TerraUSD, a so-called stablecoin.
FTX, which Bankman-Fried co-founded in 2019, was valued at $32 billion in a February funding round, and Bankman-Fried itself is worth $21 billion, according to Forbes.
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