For the CEO of MicroStrategy, bitcoin is digital property, ethereum is digital security
MicroStrategy CEO Michael Saylor, who appeared on a recent episode of the UpOnly podcast, said the most important thing for a long-term crypto investor to understand is the political status of a crypto asset i.e. whether it is a crypto property. or cryptographic security.
“As far as I can see, bitcoin is a cryptographic property and by ownership, it means that it is seen as a piece of fair and common ownership outside the control of a company or group of individuals,” said Saylor, adding that it is quite difficult to create a property.
Bitcoin was created by the pseudonym Satoshi Nakamoto, who released the original bitcoin white paper in 2008. Coins are created through mining, meaning there has never been a pre-mine or initial offering of coins ( ICO). Bitcoin uses the proof-of-work (PoW) mechanism, which according to Saylor is “fair distribution”.
Pointing out these aspects, Saylor said that bitcoin can easily be classified as a digital property. However, he has classified every coin that allows staking or uses the proof-of-stake (PoS) mechanism as digital security.
“It has been explicitly stated by regulators that if there is a stake and it generates a return it is an investment contract and an investment contract is a security,” said Saylor. Recently, there has been some discussion as to whether Ethereum is actually a security. This is because Ethereum was also originally funded through an ICO, which took place in 2014. At the time, users had the opportunity to trade their BTC for ETH tokens, and more than 7 million ETH tokens were sold in the former. 12 hours.
According to Saylor, the problem with stocks is that they are in a regulatory gray area. “In order to invest, you need to be willing to accept stock risk, legal risk, competitive risk, and literal cybersecurity risk,” he said. This partly explains why Saylor, a bitcoin maximalist, has stayed away from ethereum despite all the recent growth around decentralized finance (DeFi) or non-fungible tokens (NFTs) which are mostly built on Ethereum.
Notably, Saylor’s Microstrategy continued to buy BTC despite all the volatility and declines. By the end of 2021, the company held approximately BTC 124,391, acquired at an aggregate purchase price of $ 3.75 billion and an average purchase price of $ 30,159 per bitcoin, including fees and expenses, according to documents shared with. the United States Securities and Exchange Commission (SEC).