The FTX CEO’s comments about Bitcoin drew backlash from the crypto community, many of which reminded him of Solana, a PoS network that went down half a dozen times.
Sam Bankman-Fried, founder of cryptocurrency exchange FTX, has criticized the effectiveness of Bitcoin (BTC) as a payment network, but has faced strong backlash from the crypto community.
During an interview with the Financial Times, Bankman-Fried expressed environmental concerns surrounding the Proof-of-Work (PoW) consensus on the Bitcoin network, stating that it does not scale well enough to process millions of transactions.
Instead, he advocated the use of Proof-of-Stake (PoS) mining consensus, arguing that it is better suited to blockchain payment networks. He said:
“Things you use to do millions of transactions per second need to be extremely efficient, lightweight, and reduce energy costs. There are Proof-of-Stake networks.”
Bankman-Fried’s comments coincided with recent calls for a total ban on PoW by a billionaire lobbying group that includes the co-founder of Ripple and several other environmental groups. However, Bitcoin advocates have been actively fighting against the ongoing narrative calling for a change in the mining consensus code of the Bitcoin network.
Related: Eager to Work: Bitcoin Proof-of-Stake 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 did not like the recent comments of the FTX CEO. Many have argued that the Bitcoin network was not intended as a payment network, but rather as a billing and layer 2 (L2) solution, similar to the Lightning network acting as the primary payment gateway. 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 heavily centralizing and simultaneously shutting down PoS networks such as Solana (SOL). User wrote:
“Thank God we have a Soilana that can be turned off and on every week!”
Another Reddit user wrote:
“He has no idea what he is talking about (and neither does the journalist interviewing him). Scaling has NOTHING to do with the consensus algorithm, so whether it’s POW or POS has nothing to do with scaling issues.”
The FTX CEO took to Twitter to clarify his comments, stating that he also talked about the potential of the Bitcoin network as a store of value. He said:
“To be clear, I also said that it has potential as a store of value. The BTC network cannot support thousands/millions of TPS, although BTC can be transferred to Lightning.”
Bankman-Fried further clarified that he was talking about the Lightning Network and its use for BTC payments, but the author of the article missed it. In response, one of the users also agreed to integrate LN on FTX, saying:
The debate about PoW and PoS began last year when the Ethereum network laid out its plan to move towards PoS mining consensus. People like Elon Musk have created the feeling that BTC needs to use more clean energy to be a viable option. However, in 2022, the debate seems to have shifted towards a complete change in mining consensus for the BTC network.