Buterin challenges Saylor’s view on Bitcoin custody risks

Vitalik Buterin, co-founder of Ethereum (CRYPTO:ETH), has openly criticised Michael Saylor’s recent advocacy for institutional custody of Bitcoin (CRYPTO:BTC).

In response to Saylor's claim that large institutions can minimise the risk of asset seizure, Buterin emphasised that such a perspective undermines the decentralised foundation of Bitcoin.

Saylor, during an interview on October 21 with Madison Reidy, discussed various topics, including the need for user-friendly Bitcoin investment products to encourage mainstream adoption.

However, his comments regarding Bitcoin's potential centralisation due to institutional custody sparked backlash.

He dismissed concerns about increased seizure risks, labeling critics as “paranoid crypto-anarchists.”

“People say that, but it’s mostly paranoid crypto-anarchists. It’s a myth and a trope that repeats itself,” Saylor argued.

He further contended that regulated entities like BlackRock and Fidelity should primarily hold Bitcoin to shield it from government interventions and stabilise its role in the financial system.

He cautioned that unregulated holders could pose a greater risk of triggering a seizure event due to their disregard for laws.

Buterin's rebuttal came on October 23, where he responded to a post by crypto security expert Jameson Lopp.

He asserted that Saylor’s perspective promotes centralisation, contrary to Bitcoin's core principles.

Buterin highlighted advancements in security technologies, such as zero-knowledge proofs and account abstraction, that make self-custody more viable and necessary for Bitcoin’s integrity.

Buterin acknowledged Ethereum's own centralisation challenges, noting that over 60% of its nodes run on centralised services like Amazon Web Services and Google Cloud.

He proposed using stateless clients as a long-term solution, although he admitted it may take 10 to 20 years to implement effectively.

At press time, the Bitcoin price was $67,200.55.