Are functional components converted into class components by React?

There is no “optimized” support for them (functional component) yet because stateless component is wrapped in a class internally. It's same code path.

From a twitter thread by Dan Abramov.

Is there any performance benefits to using functional, rather than class components?

Apparently right now there is no performance benefits because React does a lot of things on Functional Components which decreases performance. Read this to gain more understanding.

Should I really sacrifice my workflow

I guess not

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