Vitalik Buterin, the Ethereum co-founder and an influential voice in the crypto space has reacted to the latest comments on Bitcoin made by Michael Saylor, the co-founder of Microstrategy and another respected voice in the crypto space.
The Ethereum cofounder reacted to Michael Saylor suggesting in an interview that crypto users should use big banking institutions to hold custody over Bitcoin.
Vitalik Buterin reacted to the assertion calling Michael Saylor’s comments Bat shit insane while pointing out that regulated public entities are already invested in holding Bitcoin and their role in the Crypto story shouldn’t exceed that.
“I probably did more than most to spread the “mountain man” trope (btw I consider those remarks of mine outdated; snarks and AA changed the tradeoff space completely), and I’ll happily say that I think @saylor‘s comments are batshit insane.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 regulatory capture approach to protecting crypto (“When you have regulated public entities like Blackrock and Fidelity and … holding the asset, all the lawmakers and law enforcement arms are invested in those entities”). There’s plenty of precedent for how this strategy can fail, and for me, it’s not what crypto is about.” Vitalik Buterin Tweeted
Vitalik Buterin in his argument countered the idea of Regulatory capture which implies that regulated Public entities should hold digital assets so regulators and law enforcement might be more inclined to invest in them.
Buterin believes this approach might eventually lead to these public entities taking over Bitcoin and the idea is a diversion from the decentralization Bitcoin stands for.
Other important crypto figures like Bitcoin custody firm Casa’s chief security officer Jameson Lopp and ShapeShift founder Erik Voorhees agreed with Vitalik Buterin’s stance against public entities expanding their role in the Bitcoin space by acting as Third-party custodians.
They believe the practice could set a bad precedent and it’s directly against the decentralized nature of cryptocurrencies which happens to be its biggest appeal.
Jameson Loop added to the debate by listing the importance of self-custody in the crypto space warning about the negative effects of promoting third-party custodians.
Bitcoin self-custody isn’t just about being a paranoid mountain man. There are many long-term negative ramifications to convincing people to trust third-party custodians.
1. Centralizing coins into a few hands increases the systemic risk of loss and seizure.
2. Bitcoiners get disenfranchised from participating in governance activities like running nodes or trading forks.
Self-custody is not merely important to individual Bitcoin holders. It’s important for the continued strengthening and improvement of the entire network. Jameson tweeted
Saylor’s argument is built on the notion that crypto could become a safer space if traditional financial institutions play the custodian role in it and his line of thinking was rightly countered by Vitalik Buterin who believes the decentralized nature of crypto will be lost should that happen.