Ethereum’s Buterin Slams Saylor’s Bitcoin Custody Remark as ‘Outrageous’ – Discover the Reasons
Vitalik Buterin, the co-founder of Ethereum [ETH], recently criticized Michael Saylor’s statements regarding Bitcoin [BTC] self-custody, joining a chorus of dissenting voices.
During an interview, Saylor was questioned about the risks of centralization and potential government seizures when Bitcoin custody is entrusted to major banks and third-party entities.
In response, he expressed,
“When Bitcoin is under the control of a group of wary crypto-anarchists who operate outside regulations, and refuse to comply with governmental tax or reporting obligations, the risk of confiscation increases.”
Buterin’s Critique of Saylor
These remarks stirred significant backlash within the community, with Buterin now voicing his disagreement. Buterin countered,
“I am not hesitant to say that I find Saylor’s remarks utterly preposterous. It appears that he is advocating for a regulatory capture strategy to safeguard cryptocurrencies.”
He emphasized that Saylor’s promotion of regulatory capture contradicts the core principles of the crypto industry.
Jameson Lopp, a co-founder of Casa HODL, a self-custody platform for BTC, echoed similar sentiments.
He stressed that self-custody should not be limited to ‘paranoid crypto traders,’ as advocating for third-party custody could have negative repercussions in the long term.
“Self-custody is not solely crucial for individual Bitcoin holders but also vital for the overall enhancement and fortification of the entire network.”
By opting for self-custody, users retain complete control over the keys to their wallets, whereas third-party custody diminishes user authority over their digital assets.
The inherent risks of the latter can be perfectly encapsulated by the famous adage: ‘Not your keys, not your coins.’
Samson Mow from JAN3com, an advisor on national BTC adoption, reiterated the risks associated with third-party custody, regardless of whether one is paranoid or not.
“Just because you identify as a wary crypto-anarchist doesn’t mean they are not tracking you.”
Preference of Major Corporations for Third-Party Custodians
The extensive critique was somewhat anticipated, given Saylor’s reputation as a prominent advocate and maximalist for BTC.
Nonetheless, Saylor has consistently advocated for third-party custody, particularly for major corporations venturing into the crypto sphere.
In a 2022 dialogue with Blockware, he endorsed third-party custody for big companies, citing their robust oversight mechanisms.
He described it as both a ‘boon and a bane’ for the asset,
“That’s the advantage (self-custody). The downside is when you desire major cities like New York, Chicago, San Francisco, the U.S., and 10,000 publicly traded firms to invest in and adopt Bitcoin. Then, you have to contend with the governance structures of those corporations.”
Both sides of the debate present compelling arguments. However, the mitigation of potential risks associated with centralization of the BTC network as more major firms enter the market remains to be seen.