Sam Bankman-Fried, CEO of crypto exchange FTX, drew angry reactions from the crypto community after he singled out Bitcoin and Ethereum as the two most energy-consuming blockchains. Speaking to CNBC SquawkBox, Bankman-Fried announced that his exchange is becoming carbon neutral under the “FTX Climate” initiative.
To achieve this feat, FTX had “donated $1 million to purchase roughly 100k tons of carbon offsets, neutralizing the impact of exchange’s blockchain activity.”
However, the FTX exchange is moving further and find other ways, such as committing “$1 million towards permanent carbon capture and storage and another $500,000 towards other research efforts aimed at mitigating climate exchange.”
“I think it’s the responsible thing to do mitigate – to the extent you can – the short-term impact,” Bankman-Fried told CNBC.
However, he stated that offsetting transactions FTX facilities is “not free.” And singled out Bitcoin and Ethereum are the two most energy-hungry cryptocurrencies.
“I think the other side of this is that when you look at the energy use of cryptocurrencies, there are only two major cryptocurrencies that have large energy usage-it’s Bitcoin and Ethereum, now they are the two biggest. The reason is that those are the two Proof-of-work (PoW) currencies, and proof-of-work is where all the energy usage comes from,” Bankman-Fried commented.
Bankman-Fried added that Ethereum is currently transitioning to a proof-of-stake (POS) protocol, which should require less electricity, “while Bitcoin as the most energy-hungry cryptocurrency.”
Bitcoin Community isn’t happy
Bankman-Fried did not voice any explicit criticism towards Bitcoin’s energy consumption. However, the crypto community quickly commented and lashed out at him, with users voicing their displeasure over Twitter.
One user commented, “Lost a lot of respect for [Sam Bankman-fried] with him trying to shit on PoW.” While another one added, “Ok delist Bitcoin and FTX disappears… let’s go.”
Meanwhile, many users also pointed out that high energy consumption allows PoW blockchain to remain secure and decentralized. Bankman-Fried looks agree with this opinion by stating.
Also Read: FTX and Binance Reduce Leverage Limits to The 20X
“There are lots of advantages to Pow. Its security is less reliant on historical ordering than PoS, it’s in some cases harder to quickly buy scale to attack, harder to hedge attacks etc. That being said, it does use a lot of energy, and that does not have cost. I’m not trying to make claims whether that cost is worth it- Just that it’s a fact that most of the impact comes from it.”
