How FTX’s Fallout Highlights the Virtues of Bitcoin: Michael Saylor
MicroStrategy’s Executive Chairman Michael Saylor believes FTX’s collapse only reinforces the importance of Bitcoin – his favorite crypto asset.
The former CEO spoke at length last week about the primary cryptocurrency’s relationship with the rest of the digital asset market. Is the ‘crypto’ industry helpful or harmful in spreading Bitcoin adoption?
Bitcoin’s Unique Attributes
In a Coin Stories podcast episode published on Monday, Saylor said the biggest lesson from FTX’s meltdown was “Bitcoin; not crypto.”
“This week highlights the contrast between the virtues of Bitcoin and the vices of crypto,” he said. “It illustrates the wisdom of Satoshi.”
Satoshi Nakamoto is the pseudonym that the Bitcoin’s anonymous founder used. In his whitepaper, he presented Bitcoin as a means of electronic payment that didn’t require centralized banks to operate. This meant that banks would lack the power to seize user funds, censor transactions, or inflate its native currency through money printing.
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By contrast, Saylor described ‘crypto’ as the “reinvention” of the fiat system, but in an unregulated environment. In the case of FTX, the exchange embezzled user deposits while borrowing against a cryptocurrency – FTT – that it issued on its own.
Worries around the exchange last week incited a bank run on FTX while simultaneously causing FTT to plummet over 90%. On Friday, the firm filed for bankruptcy.
Given the events, Saylor concluded that people shouldn’t store value in currencies controlled by human beings or counterparties.
“Bitcoin is nobody’s liability. There is no counterparty. Anyone that joins the network is their own banker,” explained Saylor.
Is Crypto Good for Bitcoin?
Saylor believes the broader crypto sphere has “good ideas.” However, he said they’ve been poorly executed due to their distribution on other blockchains. For example, while stablecoins can help spread dollar access across the world, they have “unfortunately” not gained much traction on Bitcoin-based rails.
Saylor also views decentralized exchanges as potentially useful for theoretically providing a 24/7 stock exchange global stock exchange. Once again, Bitcoin’s base layer is unable to provide such services due to its limited scripting language.
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BUY NOWThe chairman also viewed utility in NFTs (non-fungible tokens) – unique blockchain-based assets that are often used to create synthetic collectibles. Saylor said these can help artists monetize their brands. However, most NFTs are issued on Ethereum, Solana, and other chains, which Saylor calls “centralized crypto token networks.”
“People will pursue digital exchanges, digital currency, digital commodities… but in an ethically, technically, economically sound fashion,” he concluded.
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