FTX CEO and Billionaire Sam Bankman-Fried Unveils “Next Bitcoin”
If you ask ten crypto enthusiasts which token will be the next Bitcoin, there is a good chance you will get ten different answers. For Mark Cuban , for example, it’s Ethereum as it’s by far the largest altcoin on the market. For others, it’s Cardano , and for others, it’s Dogecoin. For Sam Bankman-Fried, founder and head of the FTX exchange, the next king of cryptocurrencies will be Solana.
In a recent interview, he talked about why he is betting on Solana, why Ethereum 2.0 won’t be the end of Solana, how to come up with the coin that will make the breakthrough, and how he got into the world of crypto-assets .
Why Solana has what it takes to be the market leader
To find the next leader in the market, you have to look at what it would take to get the next billion people excited about cryptocurrencies , says Bankman Fried . To do this, the project must be able to process tens of millions of transactions per second.
“One thing that I thought about a lot was,” What are the blockchains that can scale to this level, that can handle millions of transactions per second in a complex, native way? I have often said on record that I think Solana has a real chance to do what I find really exciting. “
But before Solana can become the next Bitcoin, it must first outperform Ethereum. The two are essentially competing for the same market, with Solana being one of the many “Ethereum killers”.
In this context, Bankman-Fried , founder and head of the FTX exchange, differentiates between the acceptance of a blockchain network and the value of the associated token. Bitcoin, for example, is the most valuable token, but its blockchain is rarely used for any application. Ethereum, on the other hand, is one of the most popular blockchains, but its token is not even worth a tenth of Bitcoin.
Hence, it is difficult to predict which cryptocurrency will see a significant increase in value.
“You could see massive institutional acceptance of ETH, the token, regardless of whether or not you see massive institutional acceptance of Ethereum, the blockchain. It’s hard to make any concrete predictions about how prices will go, ”he said.
DeFi is one of the most important factors in determining the next big project, Bankman-Fried believes. Solana has a clear lead over its competitors here.
“That’s one of the most compelling aspects of [Solana]. It has the potential to scale to where things need to scale as the blockchain grows, and it has the potential to host DeFi applications for hundreds of millions to billions of people on it. “
Nan may have Solana the potential, but the concrete introduction of Ethereum 2.0 is imminent. With the proof-of-stake protocol, Ethereum could face all the major challenges and become a killer itself by killing the “Ethereum killers” before they come into play.
But whether Ethereum 2.0 will mean the end for Solana and Co. is still open. Raj Gokal, one of the Solana founders, believes there is enough space in the market for everyone to grow.
Bankman-Fried is less optimistic about Ethereum 2.0. One of the aspects he is attacking is sharding, one of the ways Ethereum 2.0 can scale. The Ethereum infrastructure is divided into smaller parts – shards – which enables easier and faster processing of transactions.
According to Bankman-Fried, one of the disadvantages of sharding is that there will not be native compatibility between transactions on different shards. He believes that competition between participants in different shards will automatically penalize all but one user, which could lead to chaos at Ethereum.
Bankman-Fried gives good reasons why Solana has the best future and consequently he also invests in the project and would benefit from its rise. For one, he’s building a DEX called Serum on Solana. His other company, Alameda Research, was a major investor alongside Andreessen Horowitz in the Solana token sale, which raised $ 314 million in June.
The next big thing
While he supports Solana, Bankman-Fried also points out that there are several other cryptocurrencies that can “fly to the moon”. The only question is which one; and that’s not easy to find out. In contrast to traditional stocks, where several factors can be reasonably reliably analyzed before investing, the prices of cryptocurrencies can fluctuate greatly for apparently inexplicable reasons.
This is the main reason why meme coins came into existence in the first place, and are now very dominant. But the most important thing is never to invest more than you can afford to lose, notes Bankman-Fried. The team behind a project is just as important. Fraud cases like Squid Game all have one thing in common: they have anonymous teams about which nothing can be learned – so stay away from them, because an investment is far too risky. One also has to pay attention to the distribution of the supply – if a single person owns an overwhelming majority of a token, there is a risk that they will sell the tokens and disappear with the investors’ money.