Ethereum’s co-founder Vitalik Buterin criticizes MicroStrategy’s executive chairman Michael Saylor for recommending that Bitcoin enthusiasts surrender their BTC custody to big financial institutions.
Buterin is the latest crypto stakeholder criticizing Saylor for supporting Bitcoin custodianship through big banks rather than self-custody. Saylor made the suggestion on October 20 during an interview on Markets with Madison.
It bears mentioning that Saylor had been an advocate of self-custody, a practice he believed would prevent large custodians from accumulating too much power. However, his recent support for custodianship through big financial institutions came as a shock to many, leading to heavy criticism.
Ethereum Co-founder Criticizes Saylor
In an X post today, Buterin referred to Saylor’s suggestion as “batshit insane.” The Ethereum co-founder accused Saylor of advocating for regulatory capture to protect crypto.
He cited some comments from Saylor’s controversial speech, which suggests that entrusting Bitcoin custodianship to big financial institutions like BlackRock and Fidelity Investments could protect the industry, as most law enforcement agencies and lawmakers have stakes in those entities.
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In Saylor’s view, these regulators would ensure that these institutions are protected, which he believes could then extend to the crypto industry.
Reacting, Buterin asserted that there are many examples of how this strategy would not yield the desired result. Furthermore, he emphasized that Saylor’s recommendation is against the core principles of crypto, which prioritizes decentralization and financial freedom.
Other Crypto Stakeholders Criticize Saylor Recommendation
Yesterday, Jameson Lopp, the co-founder of Bitcoin custody firm Casa, criticized Saylor’s initiative, highlighting four long-term negative ramifications to the proposal.
He said convincing people to trust a third-party custodian could increase systemic risk, leading to asset seizure and loss. The Casa executive also stated that the move could disenfranchise many people from actively participating in governance.
Furthermore, Lopp suggested that centralizing Bitcoin custodianship in big financial institutions could resist innovation. According to him, these institutions do not care about advanced cryptographic features.
Lastly, the Casa co-founder said entrusting Bitcoin custodianship to big financial institutions would deprioritize permissionless scaling.
ShapeShift founder Erik Voorhees said Saylor deserves the criticism he is getting from crypto enthusiasts. According to him, Bitcoin self-custody is the entire point, adding that most essential attributes of BTC emerge from this concept.
Saylor’s getting trashed for the self-custody comment.
As he should.
Self-custody of the digital bearer asset is the entire point.
*The entire point*
All important attributes of Bitcoin emerge from this property.
This doesn’t mean that all Bitcoin holders should… https://t.co/7VREcCfRxZ
— Erik Voorhees (@ErikVoorhees) October 22, 2024
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Source: https://thecryptobasic.com/2024/10/23/ethereum-vitalik-buterin-slams-michael-saylors-call-for-bitcoin-custodianship-via-banks-calls-it-batshit-insane/?utm_source=rss&utm_medium=rss&utm_campaign=ethereum-vitalik-buterin-slams-michael-saylors-call-for-bitcoin-custodianship-via-banks-calls-it-batshit-insane