March 28, 2024

Sam Bankman-Fried: Many Companies Won't Survive Ethereum Merger

Article Reading Time:
2 minutes.

Sam Bankman-Fried: Many companies won't survive the Ethereum merger

The CEO of the FTX exchange, before Ethereum’s transition to PoS, noted the promise of this solution and warned about potential inevitable losses for the crypto industry.

Sam Bankman-Fried said that while the merger will be beneficial for Ethereum in the long term, it is reasonable to expect some turbulence when it happens.

“In the long term, the merger will allowsignificantly speed up and reduce the cost of transaction processing. But the merger, like all great transitions, will be a little bumpy at the beginning. There will be some dirty play. I think this is inevitable both in the long term and perhaps even in the medium term,” Bankman-Fried warned.

The businessman said he expected a certainconfusion among community members, which may cause some technical difficulties at first. FTX CEO predicts that some protocols will fail the transition, and then a market cleanup will be required:

“I think that a number of Ethereum forks will be created.Many miners want to keep Ethereum with proof of work (PoW). And yet the bulk is ready to switch to the proof-of-stake (PoS) algorithm. Obviously, a lot of people in the ecosystem will have to update the software to start processing the new chain."

The expert added that many will be ready for this as soon as possible, but some will not:

“I expect APIs to break in ways that people haven't quite prepared for. Errors must be corrected, at least in centralized facilities.”

When something like this happens in the market, especiallywhen this is not done by one company, but by a large decentralized ecosystem in which all elements are trying to switch to the PoS algorithm at the same time, some companies will not survive the merger and will leave the market, Sam Bankman-Fried is sure.

</p>

The head of cryptocurrency aggregator CoinGecko, Bobby Ong, citing the history of Bitcoin forks, warned that the mining community is capable of creating many “useless ETH PoW.”