17 May Jack Dorsey Responds to SBF’s Comments on Bitcoin Scaling and Proof of Work
Jack Dorsey was not pleased with FTX CEO Sam Bankman Fried (SBF)’s recent criticisms of Bitcoin’s viability as a payments system. The Block Head confronted him yesterday over his failure to acknowledge the lightning network and provided defense for the necessity of mining.
The conflict began when SBF responded to some backlash over his comments about Bitcoin in an interview with the Financial Times. While he stood by his claim that Bitcoin cannot sustain high transaction volume, he acknowledged the lightning network as an alternative, alongside the cryptocurrency’s store-of-value role.
Jack Dorsey replied with skepticism, however, pressing the CEO on why he didn’t acknowledge the lightning network during his FT interview in the first place.
and you didn’t bring up Lightning because…?
— jack (@jack) May 16, 2022
The lightning network is Bitcoin’s leading decentralized scaling solution, meant to provide the network with fast and cheap transactions that the base layer cannot. El Salvador’s Bitcoin wallet Chivo leverages this network to enable instant and free cross-border remittances from the United States.
The Bitcoin payment company Strike is utilizing the same layer 2 solution. It will soon allow major merchants across the United States to process both fiat and Bitcoin payments over lightning.
SBF simply claimed it would be a “mouthful” to list Bitcoin’s various scaling solutions every time he discusses the matter. Yet Dorsey remained unconvinced, and offered to demonstrate:
“It’s easy,” he said, “ ‘…and lightning was designed to make moving bitcoin for every day transactions fast’.”
The FTX CEO maintained that he usually mentions lightning when asked, but was simply misquoted in his interview. He also showed some interest in integrating lightning at his exchange, which would make transfers and withdrawals much faster and cheaper for traders.
Mining is the “Holy Grail”
During his interview, SBF stated that Bitcoin’s use of the proof of work (POW) consensus model contributes to its inefficiency for transactions. Other respondents within the thread backed these claims, but Dorsey stayed convinced that mining is the “holy grail” of network security.
“It’s the simplest and most intuitive,” he said, “and the one that can be most trusted given how decentralized it can be.”
The Block Head also reiterated his claims from a letter he signed to the Environmental Protection Agency last month, arguing that Proof of Stake blockchains are prone to “single points of failure”.
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