(Reuters) – The founder of cryptocurrency exchange FTX has said Bitcoin has no future as a payments network, and has criticized the digital currency for its inefficiency and high environmental costs, the Financial Times reported on Monday.
Bitcoin, the world’s largest cryptocurrency, is created through a process called “proof of work,” which requires computers to “mine” the currency by solving complex puzzles. Powering these computers requires large amounts of electricity.
An alternative to the system is called a “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 CEO Sam Bankman-Fried told FT that proof-of-stake networks are needed to further develop crypto as a payments network because they are cheaper and less power-hungry.
The blockchain Ethereum, which hosts the second-largest cryptocurrency, Ether, has been working to move onto this energy-intensive network.
Bankman-Fried also said he doesn’t think bitcoin needs to go away 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 hit its lowest level since December 2020 last week after 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.
(Reporting by Shubham Kalia in Bengaluru; Editing by Uttaresh.V)
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