TL;DR
- Vitalik Buterin has strongly criticized Michael Saylor’s recent comments on Bitcoin custody.
- Saylor suggested that Bitcoin users should trust large banks, such as BlackRock and Fidelity, to safeguard their assets.
- The crypto community, including Buterin, believes that this proposal contradicts the fundamental principles of decentralization.
Ethereum co-founder Vitalik Buterin has sparked a heated debate within the crypto community by harshly criticizing recent comments from Michael Saylor, founder of MicroStrategy.
In a conversation on Twitter, Buterin called Saylor‘s comments “completely crazy” when he suggested that Bitcoin users should trust large banks and regulated entities to safeguard their assets.
I probably did more than most to spread the "mountain man" trope (btw I consider those remarks of mine outdated; snarks and AA changed the tradeoff space completely), and I'll happily say that I think @saylor's comments are batshit insane.
He seems to be explicitly arguing for a…
— vitalik.eth (@VitalikButerin) October 22, 2024
This stance has been seen as a contradiction to what Saylor had previously advocated: the importance of self-custody.
The source of this information comes from a public discussion that originated on Twitter, where Jameson Lopp, a prominent self-custody advocate, highlighted the dangers of entrusting Bitcoins to third parties.
Vitalik responded directly to these comments, noting that Saylor’s proposal appears to be promoting “regulatory capture,” in which giant institutions like BlackRock and Fidelity would handle crypto assets under the supervision of financial authorities.
According to Buterin, this stance is far from the original ideals of the crypto ecosystem.
Saylor, who previously advocated for self-custody, suggested in an interview that “too big to fail” banks would be better suited to custody Bitcoin, arguing that regulated financial institutions have the proper infrastructure in place to protect these assets.
Buterin and other critics, however, see this as a dangerous step back toward a centralized system, where most Bitcoins would be held by a few, increasing the risk of loss or confiscation by governments or private entities.
Growing criticism of Saylor as well as Buterin
Saylor’s stance has been heavily criticized by several major players within the crypto community. Erik Voorhees, founder of ShapeShift, joined the debate by pointing out that the ability for users to withdraw their Bitcoins to personal self-custody is what prevents centralization and corruption.
Voorhees stressed that decentralization is a fundamental principle that should not be compromised, as it provides an additional layer of security for users.
Saylor’s argument has also been called into question due to the precedent of the FTX collapse in 2022, where many users lost their Bitcoins that they had left in custody on the platform. These types of incidents reinforce the importance of self-custody as a way to minimize the risks associated with trusting third parties.
Jameson Lopp, for his part, stressed that convincing users to trust their Bitcoins to large institutions not only increases the risk of loss, but also compromises the long-term integrity of the Bitcoin network. According to Lopp, the concentration of assets in the hands of a few actors can endanger the entire ecosystem.
Saylor’s proposal has sparked a debate about the fundamental principles of the crypto world. While some argue that regulated institutions could offer greater security, key figures such as Buterin and Lopp believe that this would bring with it serious risks that contradict the very essence of what Bitcoin and cryptocurrencies represent.
