Michael Saylor made waves by stating unambiguously on CNBC that the primary purpose of bitcoin is to be a store of value.
“Bitcoin does not need to be a medium of exchange”
Andrew Ross Sorkin recently drew ridicule for declaring that bitcoin was “too volatile to be a store of value”… He therefore received Michael Saylor this Monday to clarify things.
First question : “Is it impossible that the governments of the United States and China would do something that would put the growth of bitcoin at risk”? The response from the CEO of Microstrategy caused a stir:
“That’s not a very good question. Skeptics often say that bitcoin is too good to be true. That governments will eventually take it away from us. This thinking is based on a misunderstanding of what bitcoin is. People talk about money, cryptocurrency, but it’s an unfortunate linguistic heritage.
It is not a digital currency. It is above all a digital asset. Once we understand this, it appears that the raison d’être of bitcoin is the preservation of all global savings. There is no anathema to owning property. You can own a tower in Manhattan. Property rights are universal, in Europe, China or the United States. This is how it should be perceived and embraced.
All the controversies about cryptos have to do with their use as a medium of exchange. But we must understand that a medium of exchange is only worth a thousand billion dollars. A store of value is worth a hundred trillion dollars. Bitcoin will create controversy if presented as a currency, so I recommend viewing it as a store of value. »
Is bitcoin intended to be a means of payment?
Andrew Sorkin went further to ask whether bitcoin “can and must one day become a means of exchange”? Response from gigachad:
“It does not need to become a medium of exchange. No one tries to buy a coffee with a piece of their New York tower. Every rich person I know owns real estate in New York, and none of them complain about not being able to spend their apartment as if it were a medium of exchange.
The main appeal of bitcoin is that it is a store of value. The fact that it can also be used as a payment method is a distraction. Governments will always be in charge of legal tender. And that’s very good.
Bitcoin is in competition with gold, which it will eventually swallow up. It also competes with risky assets for long-term investment. It competes with the strategy of buying an apartment to do AirBNB. »
These comments do not please some who cling to the vision of a world without government, without central banks, etc.
I know he’s worth billions. But he’s so retarded. »
Many developers like Zack Voell believe that bitcoin can and should replace fiat currency. This is why they constantly propose to modify it (BCH, CTV, etc.) in order to allow this change to scale which we do not actually need.
Others, more humble, agree to reevaluate their conception of bitcoin. As Quattro :
” He is right. One of the reasons people think BTC won’t go up is because they see it as competition to state currencies as a medium of exchange. »
Saylor right in his boots
The statements of the CEO of Microstrategy are consistent with his vision that he gave us a glimpse at the Bitcoin 2023 conference in Prague:
“No country can stop inflation. No one can stop inflation. I can make you the master of the world, you won’t stop inflation.”
And during an interview a few weeks later:
“Believing that bitcoin will replace fiat currency is a distraction that causes mental impasses for many people. […] Bitcoin does not need to replace fiat currency to succeed. […] Global wealth is around $850 trillion in real estate, debt, stocks, art… Bitcoin is a better asset. People will stop buying real estate for 25 or 30 times the value of the annual rent. They will sell everything until the ratio falls to 10. Same for the shares of multinationals worth 25 times their annual profits. »
Bitcoin can certainly serve as currency, but it does not need to replace fiat currency.
One has the advantage of existing in a fixed quantity, which protects against inflation. The other has the advantage of being created ex nihilo, which makes investments more fluid.
A system with a fixed quantity of currency is too rigid. Imagine that our only currency was bitcoin and that everyone had their own wallet. How would EDF build six nuclear reactors (50 billion euros)?
What to do if it is not allowed to create money ex nihilo? We must knock on the doors of five million French people and persuade them to each lend the equivalent of 10,000 euros for 15 years. This doesn’t scale. And let’s not talk about the problem of interests…
A complex society needs the tool of debt. And bitcoin to protect against inflation (which comes primarily from physical limits to growth, but that’s another story).
Don’t miss our article: Can bitcoin replace fiat currency?
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