FTX Founder Says Bitcoin Fails as Payments Network

Bitcoin’s future as a payments network is weak due to its inefficiency, high environmental impact and lack of ability to scale, CEO and founder of crypto exchange FTX Sam Bankman-Fried told the Financial Times in a Monday (May 16) report.

“The Bitcoin network is not a payments network and it is not a scaling network,” he said, pointing to the proof of work system of validating blockchain transactions, which underpins bitcoin. He said it’s not adequate to scale to handle the millions of transactions that would be needed to make the cryptocurrency an effective means of payment.

See also: NEW DATA: 46 Million Consumers Plan To Use Cryptocurrency To Pay Merchants

Bankman-Fried is also a major investor in Solana and his statements to FT were construed by some as being misleading, according to Crypto News. Because he only bashed bitcoin and didn’t mention Lightning Network, which is the payments network that underpins bitcoin, there is speculation that he was trying to promote Solana.

The CEO maintains that FT chose his quotes “very selectively.”

He did tell the news outlet that bitcoin has a future as “an asset, a commodity and a store of value” similar to gold.

While his comments to FT are parallel to bitcoin’s plummeting value — it’s down more than 35% since January and at its lowest level since 2020 — it is also a time when more companies and countries are accepting the crypto as a payment method.

El Salvador and the Central African Republic consider bitcoin legal tender and other countries around the world are weighing different possible scenarios. PayPal, AMC Theaters, Emirates Airlines in Dubai, Etsy, Starbucks and other businesses are either accepting bitcoin and other cryptos as payment methods or exploring ways to jump in.

Read more: More Consumers Buying Crypto and Want More Ways to Spend It

BitPay CEO Stephen Pair told PYMNTS’ Karen Webster recently that people will spend crypto more as the number of businesses accepting it as a payment method increases. Merchants are asking their payment processors to support it so they can offer it to their customers.