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Vitalik Buterin Slams Michael Saylor’s Pro-Bank Bitcoin Custody Plan
Vitalik Buterin, co-founder of Ethereum, has criticized Michael Saylor’s recent proposal to have large financial institutions and entities like the "too big to fail" banks handle Bitcoin custody. Saylor’s plan has raised eyebrows within the Bitcoin community, with many arguing that this approach goes against the decentralized nature of Bitcoin and other cryptocurrencies.
Vitalik Buterin’s Critique
In response to Saylor’s comments, Buterin has come out to protest and label Saylor’s approach as "batshit insane." Buterin, who has been instrumental in shaping discussions around decentralization in the crypto space, argued that relying on large financial institutions like BlackRock and Fidelity for Bitcoin custody contradicts the core principles of cryptocurrencies.
Buterin also mentioned that Saylor’s proposal results in regulatory capture, where powerful financial institutions take over Bitcoin and put the decentralization of the asset at risk. He recalled that earlier, he spoke about certain decentralized principles, but the appearance of new cryptographic tools like zk-SNARKs and account abstraction changed the landscape of self-custody.
A Real Value of Crypto is Decentralization
Buterin emphasized that the real value of crypto lies in decentralization and the ability to work outside the existing financial systems. He believes that the true potential of cryptocurrencies is in their ability to empower individuals to take control of their financial lives without relying on intermediaries.
Backtracking on Self-Custody
Michael Saylor, on the other hand, was a strong advocate for self-custody in the past, stressing that without it, there cannot be a decentralized network. In a recent interview, he changed his stance, suggesting that large institutions should be responsible for Bitcoin custody, not the users. Saylor downplayed the risks of government actions, saying that anyone thinking that governments would seize Bitcoins is a "paranoid crypto-anarchist." However, he believes that large financial institutions are more suitable for the role of Bitcoin custodian due to their size and experience.
Criticism from Other Industry Insiders
Jameson Lopp, co-founder of Casa, a company that advocates for self-custody, also chimed in, emphasizing the significance of self-custody for the health of the Bitcoin network. He pointed out that having many Bitcoins in the hands of a few big organizations could result in the emergence of new systemic risks such as seizure or loss of assets.
Conclusion
In conclusion, Vitalik Buterin and other industry insiders have spoken out against Michael Saylor’s shift from self-custody to institutional custody, arguing that this approach undermines the decentralized nature of Bitcoin and other cryptocurrencies. While Saylor believes that institutions are better suited for custodial purposes, the risks associated with concentration of power and control are significant.
FAQs
- Q: Why does Vitalik Buterin disagree with Michael Saylor’s proposal?
A: Buterin believes that Saylor’s plan goes against the decentralized principles of Bitcoin and other cryptocurrencies, which are designed to empower individuals to take control of their financial lives.
Q: What are the risks associated with relying on large institutions for Bitcoin custody?
A: There is a risk of regulatory capture, where powerful financial institutions take over Bitcoin and put the decentralization of the asset at risk.
Q: How does Saylor believe institutions can be trusted for custodial purposes?
A: Saylor downplayed the risks of government actions, believing that large institutions are more suitable for the role of Bitcoin custodian due to their size and experience.
Q: What is Jameson Lopp’s take on self-custody?
A: Lopp believes that self-custody is essential for the health of the Bitcoin network, as it enables users to make their own decisions about software updates and forks.
