Saylor has created a fiat system on top of Bitcoin

[Free Market Capitalist]

So, let's address the elephant in the room here.

Bitcoin is a digital asset that was created as a peer-to-peer currency and as an alternative to governments and central banks' debt-based fiat money.

I often see people talking about Michael Saylor and his company, Strategy, with little understanding of the subject, but without addressing what I believe is a crucial point: what he is doing is completely contrary to the very purpose for which Bitcoin was created.

I haven’t seen anyone address this issue, and I think it’s high time someone did.

Bitcoin has a hard cap of 21 million coins. Period.

In contrast, what Michael Saylor is doing is creating a debt system (using so-called “digital credit”) based on the Bitcoin he buys. Not only that, but based on the Bitcoin he buys, he’s printing shares like there’s no tomorrow, just as central banks do.

Currently, his company holds 843,738 bitcoins, but let's see how many shares his company has issued so far:

https://www.strategy.com/shares



Notice that those are in '000s. So, when you see 332,056 class A shares, there are actually 332,056,000, so 332 million shares. Those are only the class A shares and in that picture preferred shares are not included. Notice also the growth in each reported date. In other words, he’s taken a finite asset and is printing shares in a potentially infinite manner—and based on faith, too. At first, that faith was that MSTR would always trade above 2 mNAV; then, that Bitcoin would have a 30% CAGR over the next 20 years; and lately, he’s scaled that back to 2 or 3%.

In other words, in the end, faith boils down to the fact that no matter what happens, Saylor’s move will pay off.

His latest move—the STRC preferred stock he’s been promoting so heavily—is the ultimate expression of this. It involves issuing more and more STRC shares. Currently, there are over 100 million shares outstanding.

So, I am arguing here that no matter how much Bitcoin he buys, printing potentially billions of shares to buy Bitcoin is totally contrary the original intent behind Bitcoin's creation, and the same goes for digital credit, no matter how much he wants to praise Satoshi. 

[BitGoba]

We cannot stop anyone from doing whatever they want with Bitcoin. Since Bitcoin is the best form of money ever used by humanity, it was inevitable that bankers, BlackRock, Saylor, and various other fraudsters would eventually appear around it offer various financial products and “paper Bitcoin,” using the same kinds of manipulation and fraud that have been practiced with gold for centuries.

Bitcoin has an advantage over gold because it will be much harder for fraudsters and bankers to manipulate. Bitcoin is relatively easy to hold in self-custody, giving people direct control over their own money.It is much easier to verify how much Bitcoin exists. With gold, it is far more difficult to verify how much is actually held in a vault or to take it into self-custody. That is why fraud and manipulation have been possible for so long.

[Comeacross]

I understand your point clearly but first of all, Saylor does not claim he's preserving Satoshi original vision. He's trying to to turn bitcoin into the base layer for cooperate and capital market finance. Saylor is not creating or violating bitcoin money properties. The 21 million supply is fixed and can not be changed. Everything depends on the angle you are viewing from. If you are viewing from the point of censorship resistant, then Saylor is doing completely opposite but if you see bitcoin as money good, he's taking it to another level faster.

[Smartprofit]

This is the problem (in my opinion): Michael Saylor is destroying Bitcoin's fundamental value. 🙋

What is Michael Saylor doing? He's removing Bitcoin from circulation. He doesn't even hide the fact that this is his primary goal. But then another question arises: if Michael Saylor and other institutional players remove Bitcoin completely from circulation, won't that mean a complete halt to transactions on the network? And how will miners make money in this situation? Considering that the network experiences a halving every four years, the cost of Bitcoin mining effectively doubles every four years.

Michael Saylor also uses centralized Bitcoin storage (in Coinbase cold storage). This directly violates the principle of Bitcoin's decentralized storage. It creates a single point of failure in the system.

As for his stocks and bonds, in my opinion, they can be considered surrogate Bitcoin.  It's as if someone were counterfeiting government banknotes but positioning themselves as the main defender of the monetary and financial system. 🤷

[Ambatman]

I really really did expect people to be wiser after the ATMs few months ago
Issuing of their shares feels infinite
It's like running from an unlimited supply by the government to one by a company.
But as a business man I would give it to him for using debt
Since the world is a little bit biased towards debts.

Saylor is not creating or violating bitcoin money properties. The 21 million supply is fixed and can not be changed.

Bitcoin is decentralised Money
I believe that should Answer your statement.

What is Michael Saylor doing? He's removing Bitcoin from circulation. He doesn't even hide the fact that this is his primary goal.

Well Bitcoin is permissionless and I can choose if and when I want to spend my money.
He's following from the POV of digital Gold how government hold golds.

if Michael Saylor and other institutional players remove Bitcoin completely from circulation, won't that mean a complete halt to transactions on the network? And how will miners make money in this situation?

That's impossible and they gain nothing from it
There's always a price they can't resist.
They can only buy if there are people to sell.

 

the cost of Bitcoin mining effectively doubles every four years.

Reward Is halved doesn't mean cost is doubled
Cost is influence by different factor like location, energy

Michael Saylor also uses centralized Bitcoin storage (in Coinbase cold storage). This directly violates the principle of Bitcoin's decentralized storage. It creates a single point of failure in the system.

Saylor says alot of things but actions show alot
He doesn't really care much about Bitcoin
It's emphasis is on it been digital Gold.

[PrivacyG]

Saylor is a Billionaire doing Billionaire things.  Saylor is praising Bitcoin, Decentralization et cetera while he is grabbing all there is for his own well being.  If you thought he is saving Bitcoin and putting all that effort in making us all richer, it may be time to finally wake up to reality!

Anyway.  The first culprits of this are the people who blindly purchase his shares like a herd of sheep.  When the Mount Saylor falls, get your selves ready for what is coming because all the idiots who blindly purchase and are all hyped up now will drop from the same cliff at the same time!

-----

But then another question arises: if Michael Saylor and other institutional players remove Bitcoin completely from circulation, won't that mean a complete halt to transactions on the network?

This will never happen.  Naturally, things will balance in such a way that some Bitcoin will still be in circulation.  The people who purchase Strategy shares, I assume they purchase as a way to avoid purchasing Bitcoin directly while also riding the Strategy hype.  Sounds very stupid considering how easy it is to store Bitcoin on your own but it is what it is.

There is no such thing as removing Bitcoin completely from circulation.  In fact.  If there ever comes such a day, prepare to become rich as HELL as you will have a rarity you can barely find any where to purchase any more.

And how will miners make money in this situation?

This partially answers the question you raised above.  There is no way Bitcoin circulating supply is removed from circulation and Miners are one reason for it.

Michael Saylor also uses centralized Bitcoin storage (in Coinbase cold storage). This directly violates the principle of Bitcoin's decentralized storage. It creates a single point of failure in the system.

Tell all the people who purchase his shares particularly this.  They do not care.  Their goal is one and only.  Making money.

[Curious T]

So, I am arguing here that no matter how much Bitcoin he buys, printing potentially billions of shares to buy Bitcoin is totally contrary the original intent behind Bitcoin's creation, and the same goes for digital credit, no matter how much he wants to praise Satoshi. 

Many ways people own or use Bitcoin are against the original intent of Bitcoin's creation. Take ETFs, for example. What is the point of Satoshi creating a self custody asset/currency if people are just going to hand over that power to another company? It's one thing to leave your Bitcoin in an exchange, at least, even though you don't hold the keys, you can still withdraw the Bitcoin, if you want to (except things go wrong). With ETFs, you don't hold the bitcoin at all.

What is Michael Saylor doing? He's removing Bitcoin from circulation. He doesn't even hide the fact that this is his primary goal.

And this is beneficial for Bitcoin's price, actually. The fewer coins in circulation, the higher the price if the demand remains the same.

But then another question arises: if Michael Saylor and other institutional players remove Bitcoin completely from circulation, won't that mean a complete halt to transactions on the network?
And how will miners make money in this situation? Considering that the network experiences a halving every four years, the cost of Bitcoin mining effectively doubles every four years.

When you say "remove Bitcoin completely from circulation", you mean they all sold it off, right? In that case, they would all lose because triggering a selling frenzy like that would immediately crash the price, and since they hold more bitcoin than most, they would lose the most. More supply with the same amount of demand is equal to a lower price. The price will just keep going down as more and more people sell.

As for miners, I'm still reading up on this stuff, so I'm not really sure about my answer, but so far, I understand that if the price of bitcoin becomes too low and it is totally unprofitable for miners to mine bitcoin, this would mean a lot of miners would go offline, thereby adjusting the difficulty adjustment.   Again, I don't fully understand the difficulty adjustment yet, but technically, it means you won't need so much power and expensive hardware to mine Bitcoin. Don't forget that there was a time people mined Bitcoin with just their laptops.

[Free Market Capitalist]

What is Michael Saylor doing? He's removing Bitcoin from circulation. He doesn't even hide the fact that this is his primary goal.

Well Bitcoin is permissionless and I can choose if and when I want to spend my money.
He's following from the POV of digital Gold how government hold golds.

He doesn't buy P2P, he doesn't store his Bitcoins with his private keys, and what he does is act like a central bank, printing more and more shares instead of banknotes.

Just as central banks hold gold reserves but banknotes are not redeemable for that gold, Strategy’s shares are backed by the Bitcoin it holds, but a shareholder cannot demand to be given x amount of Bitcoin in exchange for his shares, no matter how much “exposure” they have.

That’s why I say that no matter how much he praises Satoshi in his speeches, what he’s actually doing runs counter to the very purpose for which Satoshi created Bitcoin.

[viljy]

I haven’t seen anyone address this issue, and I think it’s high time someone did.

https://bitcointalk.org/index.php?topic=5581343.msg66750105#msg66750105


You have raised a very important issue. What Strategy is doing is not immediately obvious, but it can have negative consequences. It will be interesting if in the end Michael Saylor announces the severance of the connection of his shares with bitcoin, as Richard Nixon announced in 1971 the abolition of the exchange of dollars for gold. It will be funny if the shares retain their value at the same time, because Strategy is "too big to fail"

[Free Market Capitalist]

It will be interesting if in the end Michael Saylor announces the severance of the connection of his shares with bitcoin, as Richard Nixon announced in 1971 the abolition of the exchange of dollars for gold.

Well, actually, if you had actually read and understood my former post you wouldn't talk about that analogy because that "severance" is by default.

Just as central banks hold gold reserves but banknotes are not redeemable for that gold, Strategy’s shares are backed by the Bitcoin it holds, but a shareholder cannot demand to be given x amount of Bitcoin in exchange for his shares, no matter how much “exposure” they have.

[MinoRaiola]

We cannot stop anyone from doing whatever they want with Bitcoin. Since Bitcoin is the best form of money ever used by humanity, it was inevitable that bankers, BlackRock, Saylor, and various other fraudsters would eventually appear around it offer various financial products and “paper Bitcoin,” using the same kinds of manipulation and fraud that have been practiced with gold for centuries.

Everyone has the freedom to do whatever they want with Bitcoin, that is one thing. But im happ that Bitcoin cant be heavily controlled by a few people. All those nodes around the world can be set up by anyone. The fact that the blockchain is immune to manipulation is another amazing feature. Im happy Bitcoin exists the way it does today. No matter what regulations the world do, we as people can stand up to them through peer-to-peer network and trade with each other legally. There is no third party to take some profit, only the miners who help us to verify the transactions.

[bitmover]

His latest move—the STRC preferred stock he’s been promoting so heavily—is the ultimate expression of this. It involves issuing more and more STRC shares. Currently, there are over 100 million shares outstanding.

So, I am arguing here that no matter how much Bitcoin he buys, printing potentially billions of shares to buy Bitcoin is totally contrary the original intent behind Bitcoin's creation, and the same goes for digital credit, no matter how much he wants to praise Satoshi. 

There is no problem if he prints 10 billion shares. The important is the amount of bitcoin per share. And if he lies  the price of the share may collapse.

For now  his website says about 220 shares per bitcoin
https://www.strategy.com

[Free Market Capitalist]

There is no problem if he prints 10 billion shares. The important is the amount of bitcoin per share. And if he lies  the price of the share may collapse.

For now  his website says about 220 shares per bitcoin
https://www.strategy.com

There is a problem, that he has created a fiat system on top of Bitcoin, acting like central banks do. That's the point I am making here.

You don't need to remind me of the Bitcoin per share concept, I've known about it since it was created but that's not what I am talking about here.

[Lucius]

So, let's address the elephant in the room here.

Bitcoin is a digital asset that was created as a peer-to-peer currency and as an alternative to governments and central banks' debt-based fiat money.

I often see people talking about Michael Saylor and his company, Strategy, with little understanding of the subject, but without addressing what I believe is a crucial point: what he is doing is completely contrary to the very purpose for which Bitcoin was created.
~snip~

Well, anyone who understands what Bitcoin is has probably long understood that Saylor is working for his own interests and that Bitcoin is just a tool he uses to generate as much profit as possible. The problem is of course the way he does it, but to be honest, 90% of those who own Bitcoin believe that the more coins he buys, the higher the price will be. At the end of the day, that's all that matters.

The real question is how far he can go in what he's doing, or how likely is it that the business will start to collapse at some point? These 840+ thousand BTC that he currently has is a huge amount that would destroy the price of BTC for a very long time in the event of the collapse of his company.

Unfortunately, today Bitcoin has become too dependent on individuals, companies, funds, and politicians who have one common denominator - they are all from the US.

[Smartprofit]

When I write about Bitcoin's complete withdrawal from financial circulation, this doesn't necessarily mean Michael Saylor and BlackRock will buy up all 17,000,000 coins (coins whose users have saved their private keys). To achieve his goal, Michael Saylor only needs to buy up all the coins used for payments in transactions. After that, the Bitcoin blockchain
will be as merry a place as a graveyard.🙆

What will happen to miners? Their income from transaction fees will become zero... As for Bitcoin mining income, it won't be zero, of course, but it will decrease significantly, and mining costs will increase. This is the perfect combination for a commercial company to go bankrupt!

Yes, Bitcoin has a built-in mechanism for reducing mining difficulty. However, mining difficulty cannot be reduced indefinitely! After a certain period of time, network security will deteriorate so much that a successful 51% attack on Bitcoin will occur.

The worst-case scenario is that this situation worsens with a fall in Bitcoin's price. Because once investors realize that the actions of Michael Saylor and other institutional players are driving Bitcoin's price down, not up, they will begin selling en masse. This will further exacerbate the situation.

In this case, governments could deal Bitcoin the final blow. To save the financial system, they could, for example, ban mining. 🤷

[BlackHatCoiner]

Since when is issuing and selling shares contrary to the purpose of Bitcoin? Saylor is just taking advantage of the fiat system to build a bank that offers better returns than other banks. The fiat system is designed so that every business eventually becomes interest rate arbitrage business.

This has nothing to do with central banks. Central banks create money out of thin air and force you to treat it as legal tender through the threat of violence. Everyone purchasing shares from Strategy does it voluntarily.

[tbct_mt2]

Since when is issuing and selling shares contrary to the purpose of Bitcoin? Saylor is just taking advantage of the fiat system to build a bank that offers better returns than other banks. The fiat system is designed so that every business eventually becomes interest rate arbitrage business.

This has nothing to do with central banks. Central banks create money out of thin air and force you to treat it as legal tender through the threat of violence. Everyone purchasing shares from Strategy does it voluntarily.

At least people buy Strategy shares voluntarily, not mandatory and it's better than buying shitcoins, though the leveraging strategy of Strategy recent years is actually a big risk for Strategy's investors. If people are aware about this, feel comfortable when voluntarily buying Strategy's shares, I think they're good with their choices and the rest will belong to the future.

Bitcoin success in the future will be helpful for Bitcoin investors and for companies with derivative products related to Bitcoin like Strategy but investing money directly in Bitcoin will be safer than investing money in Strategy's shares and it won't change with time.

[red4slash]

Previously I liked him by always putting forward a maximalist who was like an ideology for himself even though maybe I wouldn't follow that for now but I quite like him who continues to say that he is a maximalist but indeed it seems that for now what he is doing with his claims is only an initial plan to continue his intention to gain momentum and create greater profits.

From the beginning he was not even too open with wallet transparency because it was considered a privacy for himself but on the one hand he tried to develop the business he had, especially with the shares listed here on behalf of bitcoin. The problem is that when that is done in the end we also cannot intervene in whatever he does because it is even possible that he does not care about this which shows that actually even though he will claim many things about bitcoin including the maximalists he always echoes but of course personal gain will always make him slowly lose his way with the original goal.
By looking at what he is doing now even though he will still be in the name of bitcoin but in the end he only wants to create an ideal system for personal gain with shares that always grow along with bitcoin purchases.

[M2_ULTRA1]

I believe it is essential to distinguish Bitcoin from the financial instruments developed around it.
Bitcoin's total supply is still fixed at 21 million coins. The Strategy cannot generate new bitcoins or alter Bitcoin's monetary policy. Saylor's approach involves issuing shares and debt to obtain more BTC, which results in dilution for shareholders but does not lead to inflation within Bitcoin itself.The fundamental issue at hand is whether investors ought to hold Strategy shares or invest directly in Bitcoin. Shareholders face corporate risks, whereas Bitcoin holders enjoy the advantages of self-custody and a limited supply.
In my opinion, Strategy is constructing a Bitcoin-backed financial framework on top of Bitcoin, rather than establishing a fiat system within Bitcoin. The core of Bitcoin remains unchanged; it is the traditional financial layers surrounding it that continue to progress.