FTX boss Sam Bankman-Fried believes bitcoin has no future as a payments network, because its 'proof of work' system means it can't scale up

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In an interview with the Financial Times, Bankman-Fried said that the bitcoin network is not a payments network and is not a scaling network.

Things that you are doing millions of transactions a second have to be lightweight and efficient. He said that proof-of-stake networks are.

Proof of stake and proof of work are the two main ways to verify transactions. The first call for those on the network to put up currency is to approve a new block. The second requires high-powered computers to compete to solve puzzles, which can eat up electricity.

Bankman-Fried said that it has to be the case that we don't scale this up to the point where we are spending 100 times as much as we are today on energy costs for mining.

Proof-of-work mechanisms have come under fire. According to the environmental group, an outdated technology that uses massive amounts of energy is a huge source of climate pollution.

In Europe, a top financial markets regulator called in January for a ban on proof-of-work bitcoin mining.

Going by the example of ethereum, moving from proof of work to proof of stake is not easy. It has been seven years since the beginning of the shift, but it is close to merging.

Bankman-Fried thinks that while it may not be viable for payments, it still has a place as an asset, a commodity and a store of value.

The market bloodbath last week saw ether, cardano, and solana plummet. After falling below $25,500 on Wednesday, it was trading at $29,866.

According to analysts from JP Morgan, the crash of thecryptocurrencies isn't a repeat of last winter. They explain why market conditions could still bring significant upside despite reverting institutional demand.