In a recent podcast interview, Michael Saylor, the CEO of MicroStrategy, stated that the corporate purchase and custody of Bitcoin should not be a cause for concern. Saylor outlined three main reasons driving the need for custodians in the Bitcoin space: technical, political, and natural. From a political standpoint, relying on third-party custodians may be necessary due to political reasons. On the technical side, Saylor argued that layer-3 third parties, such as Bank of America and Apple, will be unavoidable for certain transactions. Lastly, Saylor suggested that for natural reasons, some individuals may find it safer to entrust their Bitcoin to others. Saylor emphasized the importance of embracing the diverse ways people integrate and utilize Bitcoin, as there is no one right answer. The market will ultimately determine the optimal blend of Bitcoin integrations.
Bitcoin bought by corporate giants should not be feared — Michael Saylor
In a recent podcast interview, Michael Saylor, the CEO of MicroStrategy, shared his perspective on corporations buying and custodizing Bitcoin. He argued that this trend should not be a cause for concern, highlighting three main reasons driving the need for custodians. Saylor believes that as Bitcoin becomes more integrated into society, it will serve diverse use cases, necessitating different types of custodians. In this article, we will explore Saylor’s reasons for custodians, including political, technical, and natural factors. We will also discuss how the market plays a role in determining the optimal blend of Bitcoin integrations.
Reasons for Custodians
Overview of Three Main Reasons for Custodians
Saylor identified three main reasons for the need of custodians: technical, political, and natural. Each of these factors contributes to the growing importance of custodianship in the Bitcoin ecosystem.
From a technical standpoint, Saylor highlighted the reliance on layer-3 third parties for certain transactions. He mentioned that there will be individuals who prefer to transact in cryptocurrency using their mobile phones, which requires trust in layer-3 third parties like Bank of America and Apple. These trusted intermediaries provide the functionality necessary for seamless transactions on the Bitcoin network.
Politically, Saylor argued that there will always be a need for custodians. He compared the role of custodians to the role of mayors in cities or the government in countries. Unless there is a complete dismantling of political entities like New York City, California, or Iceland, custodians will be required to navigate the complexities of political systems.
Saylor also discussed the natural reasons for custodians, emphasizing the importance of asset entrustment for certain individuals. He gave the example of an 85-year-old struggling with Alzheimer’s disease who may need someone else to safely hold their Bitcoin holdings. Additionally, he mentioned the desire to secure assets for future generations, such as a yet-to-be-born grandchild. In these cases, custodians provide a secure means of storing and managing assets.
Optimal Blend of Bitcoin Integrations Determined by Market
Saylor believes that the market will play a crucial role in determining the optimal blend of Bitcoin integrations. He argued that there is no one-size-fits-all approach to Bitcoin custody and usage. Instead, the marketplace will determine the right mix of integration options, including self-custody, multisig, and layer-3 custodians.
Saylor emphasized the need for diversity and flexibility in the integration of Bitcoin into various systems. He stated that as Bitcoin becomes more integrated into society, there will be different types of wrappers and custodial solutions to fulfill different purposes. The market’s response to these diverse integration options will ultimately shape the future of Bitcoin and its role in financial systems.
In conclusion, Michael Saylor’s perspective on corporations buying and custodizing Bitcoin provides valuable insights into the reasons for custodianship. By acknowledging the technical, political, and natural factors driving the need for custodians, Saylor emphasizes the importance of different custodial solutions in the Bitcoin ecosystem. Rather than fearing corporate giants’ involvement in Bitcoin, Saylor encourages embracing the diverse use cases and integrations that will arise as Bitcoin becomes more integrated into society. Ultimately, the market will determine the optimal blend of Bitcoin integrations, shaping the future of the cryptocurrency.