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Since it’s quite evident that the bitcoin network, in comparison with other networks, is slow, less scalable, and quite expensive
CEO Sam Bankman-Fried of the fast-paced, growing crypto exchange FTX recently said that the bitcoin network is not suitable for payments. He said on 16th May to Financial Times that the bitcoin network is not specifically a payments network as it is not at all a scaling network. The qualification of FTX CEO behind his statements of Bankman Fried by pointing to the network’s proof of work consensus mechanism that validates the transaction of bitcoins.
In a network based on Proof of Work, computers run continuously without interruptions to verify the transactions and create new network blocks, known as mining. And as bitcoin mining has industrialized over the years, the number of computers doing this work has steadily risen.
The rise in the number of nodes has led to concerns around the significant amount of energy that bitcoin needs to maintain itself, attracting criticism from environmentalists and lawmakers that attempt to achieve their goals regarding the climate. Besides this large energy-consuming cryptocurrency, the leading cryptocurrency is not speedy, particularly either.
As per the data from Blockchain.com, the average amount of transactions per second (TPS) on the bitcoin network for the last 30 days is roughly about 2.58. At the same time, compared to traditional payments networks, for instance, Visa or Mastercard, where the performance of bitcoin is of slower orders of magnitude.
Still, Bankman-Fried believes that the bitcoin network can also serve another vital purpose. To be clear, he said that the network does not have potential as a particular store of value, while he tweeted in reference to the report in Financial Times. The bitcoin network can not sustain transactions per second upto thousands or millions, although bitcoin can be transferred into Lighting or L2S, etc. The Lighting network is also a scaling solution that would allow for the number of micropayments on the top of the bitcoin network.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
