Crypto billionaire Sam Bankman-Fried has warned bitcoin will never function as a payments network due to its inefficiency, as the crypto world scrambles to steady the market after a sell-off frenzy in the past week.
Bankman-Fried, boss of digital asset exchange FTX, said the infrastructure around bitcoin was not capable of scaling to cope with the weight of millions of transactions required to make bitcoin viable as a means of payment, the Financial Times first reported.
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“The bitcoin network is not a payments network and it is not a scaling network,” Bankman-Fried told the Financial Times.
He said that the currency will function as “an asset, a commodity, and a store of value”, but said that using bitcoin for daily payments would be akin to paying for purchases with gold bars.
“Why don’t we go to a store and pay with physical gold bars? First of all, it would be ridiculous and absurd. It would be unbelievably expensive. And I’m sure it’d be bad for the climate,” he said.
His comments come after the crypto world was left reeling by a sell-off frenzy that has seen billions of dollars of value wiped from the market.
Bitcoin has lost 22 per cent of its value in the past month, while Luna shed nearly its entire value in the past week.
Do Kwon, the co-founder and CEO of Luna-creator Terraform Labs, outlined a revival plan proposal for the currency on Friday which would involve creating one billion tokens to be distributed among community stakeholders.
