Crypto billionaire Sam Bankman-Fried has warned that 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.
“The bitcoin network is not a payments network and it is not a scaling network,” Bankman-Fried said.
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 as the crypto world reels from a sell-off frenzy that has seen more than $1.5tn wiped from the value of the market.
Bitcoin has shed 22 per cent of its value in the past month and plunged to its lowest level since July 2021 last week. The value plunged over five per cent today after staging a small recovery over the weekend.
Terra (LUNA), one of the top ten most valuable bitcoins lost nearly its entire value in a matter of days last week, tumbling from $6.75 to less than one cent. As of 5pm today, it was trading at $0.0001452.
Do Kwon, the co-founder and CEO of Luna-creator Terraform Labs, outlined a revival plan for the currency on Friday which would involve creating one billion tokens to be distributed among community stakeholders.
It came as it was revealed that that Brits deem cryptocurrency trading to be a form of gambling, according to a new study from Gamban, a software company that blocks access to online gambling sites and apps across devices.
Nearly half (48 per cent) of people surveyed said they would consider stock trading in general a form of gambling, while 56 per cent deemed cryptocurrency to be gambling.