MicroStrategy’s founder and Bitcoin maximalist Michael Saylor on Monday said central bank digital currencies (CBDC) are unstable and destined to fail. He believes Bitcoin is better due to its relation to scarcity, time, and energy. In fact, Bitcoin’s inflation hedge and store of value benefits led Saylor to add it to MicroStrategy’s balance sheet.
MicroStrategy’s chairman Michael Saylor claims Bitcoin is superior to virtual currencies issued by authorities such as central banks. Bitcoin’s linkage to scarcity, time, and energy makes it better than any central bank digital currency (CBDC).
Michael Saylor also believes that Bitcoin is better than gold and real estate as scarcity is preferable to commodities or securities. Michael Saylor cites an article explaining how digital scarcity makes Bitcoin better than CBDC.
Bitcoin’s proof-of-work (PoW) makes information available to digital and physical work because the information only exists due to certain things happening in the real world. A block is formed after real people invested time and energy to bring the information into reality.
“Bitcoin’s difficulty-adjusted proof-of-work is what makes Bitcoin a real phenomenon, something to be wrestled with. It is what makes it non-virtual, non-imaginary.”
On the other hand, virtual currencies like in-game currencies and fiat currencies are not scarce. Also, their creation doesn’t require energy and time.
CBDCs are likely to fail in the future due to reasons including centralization; power to print on demand and authority; and vulnerability to bankruptcy, intervention, or collapse. Also, others may find cheap ways to create it.
Until now, central banks are conducting research and testing on CBDCs including Digital Dollar, Digital Euro, eAUD, and Digital renminbi.
Michael Saylor and MicroStrategy’s new CEO Phong Lee have committed to continue buying Bitcoin despite the BTC price fall. Last month, MicroStrategy revealed it acquired nearly 301 BTCs between August 2-September 19. Thus, MicroStrategy and its subsidiaries now hold nearly 130,000 BTCs.
Meanwhile, Bitcoin’s (BTC) price continues to struggle to surpass the $20,000 level. The BTC price is currently trading at $19,429.
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