FTX chief says Bitcoin isn't efficient or green enough to have a future as a payments network: FT
The founder of cryptocurrency exchange FTX has said that Bitcoin has no future as a payments network because of its inefficiency and high environmental costs, the Financial Times reported on Monday.
The world's largest cryptocur-rency, Bitcoin is created by a process called "proof of work" that requires computers to "mine" the currency by solving complex puzzles.
Powering these computers re-quires large amounts of electricity.
A single change in Bitcoin's cod-ing could reduce its carbon footprint by 99%, say campaigners
An alternative to the system is called the "proof of stake" network, where participants can buy tokens that allow them to join the network. The more tokens they own, the more they can mine.
FTX Founder and Chief Execu-tive Sam Bankman-Fried told the
FT that "proof of stake" networks would be required to evolve crypto as a payments network as they are cheaper and less powerhungry.
Blockchain Ethereum, which houses the secondlargest cryptocurrency Ether, has been working to move to this energyintensive network.
Ethereum merge delay could put its chances of overtaking Bitcoin as the top cryptocurrency at risk
Bankman-Fried also said he didn't believe Bitcoin had to go as a cryptocurrency, and it may still have a future as "an asset, a commodity and a store of value" like gold, the report said.
Bitcoin touched its lowest since December 2020 last week after the collapse of TerraUSD, a so-called stablecoin, which broke its 1:1 peg to the dollar.
The coin's complex stability mechanism, which involved balancing with a free-floating cryptocurrency called Luna, stopped working when Luna plunged close to zero.
Terra Luna stablecoin collapse explained: Is this the 2008 financial crash moment of cryptocurrency?
More broadly, crypto assets were swept up in broad selling of risky investments on worries about high inflation and rising interest rates,
FTX, which Bankman-Fried cofounded in 2019, was valued at $32 billion (€ 30.7 billion) in a February funding round, and
Bankman-Fried himself is worth $21 billion (€ 20.1 billion), according to Forbes.