In a recent episode of the Galaxy Brains podcast, Michael Saylor pointed out that bitcoin is not a currency and that it is better to think of it as money and capital only.
He also shared that Tether (USDT) and Circle’s USD Coin (USDC) are true digital coins and revealed his “evil genius plan” (his words) to get the world to accept US dollar stablecoins as opposed to bitcoin.
In this Take, I will quote some of Saylor’s own words from the podcast before revealing why many of the points he made are missing.
Capital, Not Money
“It’s not money, it’s capital,” Saylor said about midway through the episode.
“You just have to hold on to it – it’s not a digital currency. It is not a cryptocurrency. It is a digital currency. It is crypto capital,” he added.
I searched the Bitcoin Whitepaper to see how many times the word “capital” appears.
It is not mentioned once.
However, in both the title and abstract of the text, bitcoin is referred to as “electronic money.” Although cash can also be capital, it is not just capital. To think of bitcoin only as a currency is to deny some of its most important properties – such as the ability to use it to communicate with anyone anywhere in the world without permission.
To deny bitcoin as a currency is to deny a large part of its value proposition. Bitcoin’s roles as Store of Value (SoV) and Medium of Exchange (MoE) are inextricably linked. To find out more about this, I would advise you (with Michael Saylor) to read Breez CEO Roy Sheinfeld’s piece “Bitcoin’s False Dichotomy between SoV and MoE”.
As the episode continued Saylor continued to (wrongly) make the case for why bitcoin is money and not money.
“There are hundreds of people who are like ‘No, we want it to be money.’ We want to be able to pay for coffee with our bitcoin. Pay me in bitcoin,’” he said. “It’s like ‘Pay me in gold.’ I paid for the building. Pay me for a piece of your professional sports team. Pay me with a Picasso.’”
In fact, this is not the case at all.
Sure, bitcoin is scarce, like gold, Manhattan real estate, sports teams or famous paintings, but it has a number of other properties that make it very different from any of these other assets.
To illustrate the magnitude of that point, I’ll quote my colleague Alex Bergeron:
I invite anyone who thinks Bitcoin is like gold to launch the ultimate gold fund.
I will wait.
— Alex B (@bergealex4) December 22, 2024
Saylor then quoted – wait for it – Fed Chairman Jerome Powell’s take on bitcoin in an attempt to make his point that bitcoin is capital, not money.
“The reason that bitcoin collected the last $100,000 is because Jerome Powell on the stage said that in the world, bitcoin does not compete with the dollar, it competes with gold,” he said.
Sadly, Saylor said this without acknowledging that the man who said this is the head of the institution that Bitcoin is supposed to replace.
USDT, Not BTC
In the interview, Saylor also made the point that the real digital currencies are stablecoins for US dollars.
“Cryptocurrency, digital currency, is Tether (USDT) and Circle (USDC),” he said. “It’s a stable US dollar – that’s a digital currency.”
That’s when I started feeling nauseous.
For those who don’t know this yet, Bitcoin came to the world after the Great Financial Crisis of 2008, when the US government in cooperation with the US Federal Reserve chose to print US dollars. in abundance (lower the currency) to bail out the failing banks, the burden of which was borne by American taxpayers and holders of US dollars around the world.
Bitcoin is a decentralized currency created as an alternative to the US dollar and all other fiat currencies. Trying to convince people that bitcoin isn’t this is completely pointless, it’s very delusional.
But this is not even the worst that Saylor said the episode.
He went on to suggest that banks bailed out of the 2008 financial crisis issue their own stablecoins, which will help fund the US debt market.
“They should just create a common regime to issue a digital currency backed by American treasuries,” Saylor said.
“The US should have a framework for Tether to move to New York City. That’s what you want, right? And then you have to have a free-for-all where JP Morgan or Goldman Sachs can issue their own stablecoin,” he added.
No, Michael Saylor, that’s not what I want. In fact, it is far from what I want.
I don’t want Tether anywhere near New York City (my hometown) and I don’t want JP Morgan and Goldman Sachs issuing US dollar stablecoins that they control, basically equivalent to CBDCs.
When I think of Goldman Sachs, the first thing that comes to mind is award-winning author Matt Taibbi’s description of his agency. New York Times the best Griftopia.
“The first thing you need to know about Goldman Sachs is that you are everywhere,” Taibbi began in the letter. “The world’s most powerful investment bank is a giant vampire octopus surrounded by human faces, pumping its blood into anything that smells like money.”
Goldman Sachs, much like the US Federal Reserve, is an institution that absorbs the life force of humanity. Bitcoin was designed to remove power from such institutions, not strengthen them.
Towards the end of the episode, Saylor laid out his big plan for bitcoin and stablecoins for the US dollar.
Here it is:
“Everyone outside the US would give their left arm to invest in US bonds. So, my strategy would be – and I think it’s a bad tactical strategy; it is very good that our enemies will hate us, but our friends will complain, too. And the US could make $100 trillion in a heartbeat.
Here’s the strategy: You dump the gold, you make money with the entire gold network. You buy bitcoin — 5 million or 6 million bitcoin — and you make money through the bitcoin network. All the capital in the world, sitting on Siberian real estate or Chinese natural gas or any other money that is available as a long-term store of value – Europeans, Africans, South Americans, Asians, they all just dump their dirty property and their property. crappy capital assets and they buy bitcoin. The price of bitcoin is going to the moon.
The US is the biggest beneficiary. US companies are the biggest beneficiaries. And while you’re doing that, you’re normalizing and backing a digital currency, and you just define a digital currency as a US dollar backed equivalent of a US dollar in a US regulated custodian. What happens next?
$150 billion of stablecoins goes to $1 trillion, $2 trillion, $4 trillion, $8 trillion, probably somewhere between $8 and $16 trillion, and creates $10 to $20 trillion of sovereign debt demand. -US.
While you’re removing the marginal demand because the capital asset of bitcoin is growing, you’re replacing the need to replace the stablecoin. [The digital U.S. dollar then] instead of CNY, Rubble. It replaces all African currencies. It replaces all South American currencies. It replaces the euro.
If you really believe in US reserves and US values, every single currency in the world would simply merge into the US dollar if it were freely available.”
At this point, I stopped listening to the episode and a projectile cleaned the entire New York City subway I was sitting on.
I didn’t get into the Bitcoin space to help the US run a system where they get a huge percentage of bitcoin while plugging the world with their trash money, and it makes me very sad that someone in the Bitcoin space looks up. to come up with a comprehensive plan.
Bitcoin Money
Bitcoin is money. It is a fiat currency that has grown in value dramatically over the past decade, making it one of, if not the most powerful, instrument ever created for individuals.
To think of it as trivial, or to try to convince people that the new iteration of the working version of the currency is better than it is, is deeply flattering.
While bitcoin is capital, it is not the only one, and please don’t let Michael Saylor or anyone else convince you otherwise.
This article is a Take it. The views expressed are entirely those of the author and do not reflect those of BTC Inc or Bitcoin Magazine.