Crypto adoption

MicroStrategy Michael Saylor: Ethereum is a security

Michael Saylor, CEO of MicroStrategy and a strong supporter of Bitcoin said Ethereum is a value.

Image Source : Coingape


There is a hard fork

Saylor discussed Ethereum’s potential as a security: because it represents an investment in the underlying protocol and platform. Investing in Ethereum is investing in the success of the Ethereum network and ecosystem.

Michael Saylor, CEO of MicroStrategy and a strong supporter of Bitcoin said Ethereum is a value.

Because of its changeable nature, Ethereum is not considered a commodity. According to Saylor, the fact that Ethereum was first issued via an initial coin offering proves that it is not a commodity.

There’s a management team. There was a pre-mine. There is a hard fork. There are continuous hard forks.

He also talked about Ethereum’s hard bomb and how it’s constantly rolled over every six months, proving that the asset is a security.

If the Ethereum difficulty bomb exploded, it would discourage miners and mark the network’s complete transition to a proof-of-participation network.

According to Saylor, a cryptocurrency can only be a commodity if there is no issuer and no one is making decisions about the network.

Saylor said:

If you look at most of these cryptos, where they have hard fork after hard fork after hard fork, the problem with a hard fork is changing the protocol means that a development team makes a decision, and if you can change the protocol in a material way, you can change the monetary protocol. A hard fork can change the issuance model, or it can change the value of something. So that makes it an investment contract under securities law.

Saylor believes that Ethereum’s ability to change is also its problem with securities law. In his view, people want a decentralized protocol like Bitcoin that cannot be changed.

In the meantime, he admitted that securities have their uses. But there should be “full and fair disclosures” about these tokens.

In addition, he pointed to the Securities and Exchange Commission’s (SEC) recent statement that any cryptocurrency that generates staking returns is a security.

Saylor’s statement follows a lawsuit against Solana (SOL) over security.

The crypto community disagrees

Many in the crypto community disagree with this view. Several podcasters pointed out that even SEC Chairman Gary Gensler did not describe Ethereum as secure.

George at CryptosRU pointed out that even Bitcoin has had upgrades, including the SegWit upgrade, which was part of the reason for the Bitcoin Cash hard fork.

Additionally, Senators Kirsten Gillibrand and Cynthia Lummis proposed a crypto bill that specifically classified Bitcoin (BTC) and Ethereum as commodities.

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