Ethereums Vitalik Buterin Criticizes Michael Saylors Call for Bitcoin Custody through Banks as Bats Gone Mad

Coin World Report:
Vitalik Buterin, co-founder of Ethereum, criticized MicroStrategy’s CEO Michael Saylor’s suggestion for Bitcoin enthusiasts to entrust their BTC custody rights to large financial institutions.
Buterin is the latest critic of Saylor, a cryptocurrency stakeholder who supports Bitcoin custody through large banks rather than self-custody. Saylor made this suggestion in an interview with Madison Markets on October 20th.
It is worth mentioning that Saylor has always been an advocate for self-custody, believing that this practice can prevent large custodians from accumulating too much power. However, his recent support for custody through large financial institutions has shocked many people and attracted severe criticism.
Ethereum co-founder criticizes Saylor;
In a recent tweet, Buterin referred to Saylor’s suggestion as “extremely foolish.” The Ethereum co-founder accused Saylor of advocating regulatory capture to protect cryptocurrencies.
He quoted some controversial comments from Saylor’s speech, which suggested that entrusting Bitcoin custody rights to large financial institutions such as BlackRock and Fidelity Investments could protect the industry, as most law enforcement agencies and legislators hold shares in these entities.
Saylor believed that these regulatory bodies would ensure the protection of these institutions, and he believed that this could extend to the cryptocurrency industry.
In response, Buterin asserted that there are many examples showing that this strategy does not produce the expected results. Furthermore, he emphasized that Saylor’s suggestion contradicts the core principles of cryptocurrency, which prioritize decentralization and financial freedom.
Other cryptocurrency stakeholders criticize Saylor’s suggestion;
Yesterday, Jameson Lopp, co-founder of Bitcoin custody company Casa, criticized Saylor’s proposal, highlighting four long-term negative impacts of the proposal.
He stated that persuading people to trust third-party custodians could increase systemic risks, resulting in asset seizures and losses. Casa executives also stated that this move could deprive many people of the right to actively participate in governance.
In addition, Lopp stated that centralizing Bitcoin custody in large financial institutions could resist innovation. According to him, these institutions do not care about advanced cryptographic features.
Finally, the co-founder of Casa stated that entrusting Bitcoin custody rights to large financial institutions would reduce the scale of permissionless operations.
Erik Voorhees, founder of ShapeShift, stated that Saylor should be criticized by cryptocurrency enthusiasts. According to him, self-custody of Bitcoin is crucial, and he added that the most fundamental attributes of Bitcoin stem from this concept.
Saylor faced criticism for his comments on self-custody, as he should have.
Self-custody of digitally-borne assets is key.
*Summary*
All the important attributes of Bitcoin stem from this attribute.
That doesn’t mean all Bitcoin holders should…
[Link to the original tweet omitted]
– Erik Voorhees (@ErikVoorhees) October 22, 2024