FTX CEO Backs Solana as Payment Network, Dismisses BTC Due to Its PoW Mining Model

PoW mining needs a competitive validation method to confirm transactions and add new blocks to the blockchain. Hence, the operations of PoW mining is costlier to maintain.

FTX CEO Backs Solana as Payment Network, Dismisses BTC Due to Its PoW Mining Model

Photo Credit: Unsplash/ Dmitry Demidko

Along with its mining model, BTC is expensive in-terms of affordability for everybody

Highlights
  • FTX CEO Sam Bankman-Fried backs clean crypto practices
  • Prefers PoS mining model over PoW
  • Elon Musk also sees BTC as investment tool, not payment option

FTX CEO Sam Bankman-Fried has dismissed Bitcoin as a viable payment network option. The chief of one of world's most prominent crypto exchanges has said that Bitcoin's energy consuming and expensive Proof of Work (PoW) mining takes it out of the race of becoming a widely adopted crypto payment option. Instead, Bankman-Fried believes, Solana (SOL) should be considered as a financial alternative to traditional paying options. As opposed to BTC's PoW mining, Solana uses Proof-of-Stake (PoS) mining that allows millions of transactions each second, at cheaper costs.

“Things that you're doing millions of transactions a second with have to be extremely efficient and lightweight and lower energy cost. Proof-of-stake networks are. The Bitcoin network is not a payment network, and it is not a scaling network,” CryptoPotato quoted the FTX CEO as saying.

While the PoS mining operations use randomly selected miners to validate transactions, PoW mining needs a competitive validation method to confirm transactions and add new blocks to the blockchain. Hence, the operations of PoW mining is costlier to maintain.

Bankman-Fried, who recently purchased a 7.6 percent stake in Robinhood crypto exchange, is not the only crypto figure who does not see BTC as a feasible payment alternative.

Elon Musk, the CEO of Tesla and SpaceX also shares similar views on BTC.

In December last year, Musk had also said that Dogecoin was more deserving of being a transactional currency because BTC was not a suited substitute.

Tesla had listed Bitcoin as a payment option for a brief time last year, but quickly withdrew the feature citing environmental concerns linked with the cryptocurrency's mining.

Solana, meanwhile, seems to have become a popular choice among pro-green members of the crypto community who are looking to experiment with “efficient blockchains'.

In its November 2021 Energy Use Report, Solana claimed that two Google searches consume more energy than a single Solana transaction.

The blockchain has become a popular blockchain choice for NFT players as well. As per data tracker CryptoSlam, Solana ranks second in all-time NFT sales.

At this time, crypto miners are facing pressure to go green in terms of mining virtual assets. A bill with US's New York state authorities has called for a two-year ban on those crypto miners who aim to set shop in the region, but are not using energy efficient mining practices. Rapidly and evidently, PoS mining is becoming a more model that miners are looking to get into.

Ethereum is presently undergoing a revamp, that will shift it from a PoW mining model to PoS.

While in a proof-of-work blockchain, miners usually sell some of the newly mined cryptos to pay their bills, a PoS blockchain lets holders to get paid to validate transactions. This incentivises the ‘holding' of crypto and is good for the price.

Along with its mining models, BTC is expensive in-terms of affordability for everybody.

Musk has called BTC a better investment tool, rather than a deployable daily payments alternative.


How is Alexa faring in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.

Cryptocurrency Prices across Indian exchanges

Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Radhika Parashar
Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More
OnePlus Nord 2T Specifications Teased Ahead of May 19 Launch, MediaTek Dimensity 1300 SoC Confirmed
Share on Facebook Tweet Snapchat Share Reddit Comment google-newsGoogle News

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2022. All rights reserved.