Author: Bitcoin Magazine

Translation: Wuzhu, Jinse Finance

Michael Saylor, you are forced to realize that all value storage assets are flawed, and it compels you to focus on the only asset that is not flawed. This does not mean you are immune to the situation of a medium of exchange. When you look at the real estate market from one angle, you see how vast it is, and from another angle, how terrifying it is. But if you have experienced pain that forces you to maintain billions of dollars in purchasing power, then housing is a decent tool.

Your obsession with SoV is completely off target. The biggest aspect of Bitcoin is its role as a medium of exchange. Although the fiat currency system increasingly separates the functions of money, that does not mean it should do so. I understand that saying Bitcoin is a medium of exchange is like poking a hornet's nest, and all the other currency lords will try to stop Bitcoin. It would be great if they joined instead of fighting it. This would make all billionaires confident that they could put money into it, but merely using Bitcoin to store value is an attack on it. This approach will turn it into digital gold 2.0, captured.

Without a medium of exchange, there is no value storage! The medium of exchange comes first. You receive transactions and then store Bitcoin. If value storage is the focus, imagine announcing that you lost the keys to your Bitcoin stack—you could still store it perfectly, but without the medium of exchange function, the market will erase the top-layer fictitious fiat value. This value exists precisely because it can flow and still be used as a medium of exchange.

Oxygen tanks are crucial for reserves, but breathing is more important. Value storage is secondary and relies on transactional capability. Without transactional capability, value storage is meaningless. Michael, you experienced this firsthand when your million-dollar assets in Argentina were diluted by 90%. You struggled to preserve value not because you did not foresee its arrival, but because you could not use it as a medium of exchange. Indeed, poor value storage weakens the medium of exchange, but why is the latter prioritized? Because transactional capability is key to your responsiveness.

So far, most people who have come into contact with Bitcoin know the chart by Jesse Meyers that you promote. You claim there is no better idea than a clean value storage of $9 trillion, and then immediately call Bitcoin one of the most liquid markets in the world, operating around the clock. Guess what? Liquidity means a medium of exchange.

Now, let’s break down Jesse’s chart, starting with the real estate market. Its value is $330 trillion, but it is a very poor medium of exchange, with an annual transaction volume of only $1.3 trillion. Regulations and taxes make real estate transactions more difficult. Nevertheless, because it is over 100 times better as a value storage means, billionaires favor it, increasingly dominating the market and excluding the younger generation.

Houses may be valuable, but their value growth comes not only from the house itself but also from its connections to nearby utilities. Build a road to it, and the value will rise. Add a supermarket or gas station, or connect it to the power grid, and the value will climb again. The network creates opportunities for energy to flow into the area, increasing the chances of converting energy into economic value (like money). Therefore, transactions occurring within the network are factors that increase the value of houses. But I see another side: if you are a billionaire and everyone is coveting your resources, you would not want to build a large network around your house. You would prioritize privacy. The house may depreciate, but the goal would shift to increasing the cost for others to access you, thereby reducing the chances of being attacked.

What about the bond market? Bonds, as a value storage means, are valued at $300 trillion, with an annual trading volume of $140 trillion and new issuances of $25 trillion. This means that the value as a medium of exchange accounts for about 50% of its total value each year. In this sense, it is better than houses, but the numbers still indicate that people mainly use it as a value storage means.

Next up are stocks. Their value is $115 trillion, with a trading volume of about $175 trillion. This indicates that their advantages as a medium of exchange outweigh their value storage role. Take MicroStrategy stock as an example—you know it better than anyone. How much value did it store last year, and how much value was traded through it?

The next two parts are interesting. The annual trading volume in the art market is very small, even not shown on the chart. Meanwhile, the automotive and collectibles market has an annual trading volume close to $4 trillion. This highlights that they are primarily viewed as value storage means each year, but it also reveals how poorly the real estate market performs as a medium of exchange—even worse than the automotive market.

Oh, gold! Gold enthusiasts fervently claim that gold has existed for over 5,000 years, calling it the ultimate value storage means for whatever reason—but it only accounts for 1.78% of the value storage market. This indicates that once its role as a medium of exchange is stripped away, it can be easily captured and manipulated. Sorry, gold enthusiasts, that genie is not going back into the lamp. Gold has a value of $16 trillion, and gold enthusiasts claim it can store $120 trillion in value. They are eager to make big money, but the market disagrees, believing that flawed fiat currency is ten times better than shiny, lifeless rocks. So, is gold a better medium of exchange? Its annual trading volume is $54 trillion, driven by derivatives, making its use as a medium of exchange 3.5 times that of its value storage role.

While currency may not dominate asset value storage, it is by far the leading medium of exchange. Other value storage assets cannot even compare. What if the dollar (the top currency) became a value storage means? It would destroy the dollar network, and as the non-U.S. asset network intervenes to meet demand, the value of non-U.S. assets would rise. Over time, their value storage assets would increase, while dollar assets would plummet. The total global currency is about $120 trillion, but look at the trading volumes of the top central banks: Fedwire is about $118.2 trillion, TARGET2 about $76.5 trillion, CHAPS about $14.5 trillion, and others (partially) about $50 trillion (a conservative estimate due to incomplete data). Therefore, while value storage is $120 trillion (according to Jesse's chart), the transactional utility of these networks is over 20 times that, around $2.5 trillion. What would the value of the medium of exchange be if we include the 2 billion unbanked people? How many transactions would that trigger? What if microtransactions became possible?

Where does Bitcoin fit into all this? The mainstream narrative urges holders never to sell, positioning Bitcoin as a value storage means. However, the market tells a different story. In 2024, Bitcoin's market cap reached $2 trillion, while the value traded on its first layer—the blockchain—reached $3.4 trillion. Considering the Lightning Network (though its exact numbers remain elusive), the total could be close to $4 trillion. This indicates that Bitcoin's role as a medium of exchange is twice that of its value storage function. So, what happens if the long-standing "HODL forever" narrative begins to fade?

Due to the flaws in fiat currency, bonds and stocks pretend to be financial "tools" that act as money. This creates a market that prevents most people from protecting their wealth, further fracturing the value storage function of money. But how inclusive are these tools? Or are they merely tools that siphon value from the fiat medium of exchange, directing it to privileged individuals, billionaires, and others who need to hoard?

Globally, only 10-20% of people have access to bonds, primarily through pensions or investment funds indirectly, rather than directly. For stocks, 15-25% of the population can access them. This means that up to 80% of humanity lacks these tools to protect themselves, making them vulnerable to exploitation. Separating value storage from the medium of exchange creates a dynamic of exploiters and the exploited. This amplifies the "Cantillon Effect": those who can print the medium of exchange buy value storage assets, marginalizing 80% or more of the population. It is a feedback loop that weakens the system and widens the gap between the rich and the poor. The more money is printed, the weaker the value storage function of the currency becomes.

Another very important part of the entire system is fees. Sending dollars through the banking system incurs fees, which is a service, but what are the fees when you want to convert from a medium of exchange to a value storage tool? Much higher. This creates so much friction throughout the system and prevents the poor from storing their value. At this point, the medium of exchange increasingly becomes an extraction medium rather than a transactional one. This is also why the value storage case is more attractive in the fiat system.

Bitcoin does not pretend to be money like anything else; it is the first artificial currency that does not corrode like a melting ice cube and does not discriminate. It is the money of those who choose it. With no printer, no one wants to exchange it for "better" value storage—there is no second best. Even those without Bitcoin can use it to shape the life they want. They are no longer chasing money to store something; they are building anything that can enrich their lives on the foundation of Bitcoin.

The most important idea is not to store value but to transfer value. But to transfer value, you first need to store some. Again, to store some, someone needs to transfer some your way first. This is why the rich prefer assets that do not leak away like melting ice cubes. Meanwhile, those just starting their careers are more focused on acquiring value rather than storing something they do not yet have.

Why does the value storage case attract so much attention? One reason may be the effort involved. With value storage, you can buy and hold—no work is needed to improve your life. With a medium of exchange, you have to work hard to increase your savings and persuade others to pay for your goods or services in Bitcoin. Another factor: for most people, their fiat portfolio still exceeds their Bitcoin portfolio. They will only consider using it to improve their lives once Bitcoin surpasses their fiat holdings. This shift is not difficult for the majority of the population that lacks savings or assets. This may explain why the current system refuses to let them exit, instead pushing dependence through Bitcoin custody—exchanging one dependence for another.

Even rigidity is related to the demand for more mediums of exchange. Michael, you strongly support rigidity, but if Bitcoin is not used to reach more people, you are delaying it. Unlike you, the U.S. knows that to make the dollar the world’s reserve currency, they must distribute it widely to lock in the network effect. They see the network as key to rigidity, and because the cost of printing and sharing bills is low, it works easily. For Bitcoin, its absolute scarcity requires a balance between the amount of dissemination and storage. However, this does not mean you should not spend a dime.

The metaphor of storing fat in the body is key to long-term survival. True, but it overlooks the need for a stable food income to sustain life before storing fat. Without income, there is nothing to store—so trading comes first. However, for someone not worried about hunger, the focus shifts to storing food to prevent spoilage. I have emphasized this to highlight your bias towards value storage, which distorts your judgment and misleads others.

At this stage of my Bitcoin journey, I am convinced of this: chasing money will corrode you. Bitcoin changes that—it prevents you from endlessly pursuing money and allows you to live the life you want with it. What happens when you have enough of what you want? Then what? With Bitcoin, this is entirely possible, and every Bitcoin user should be prepared with an answer to this situation. However, chasing money is a bottomless pit that you cannot fill. The Bible says that the love of money is the root of all evil. I agree, but how does it work? What is the mechanism? Chasing money—making it the top priority and relegating everything else to secondary status—is a mechanism.

You are not establishing a Bitcoin standard—you are stacking a deck of cards. Just like with gold in the past, this time you are hoarding Bitcoin from individuals and institutions, further solidifying the fiat standard. Saylor, you are not attacking the dollar as some might think—you are supporting it by elevating your stock and its ecosystem. Instead, you are speculatively striking at those who fund your Bitcoin purchases. You are not only hurting them; by strengthening the dollar, you are exacerbating the pain of other currency holders. Hoarding Bitcoin under the watchful eyes of the world? This is not a network city—but a closed estate funded by their own money.

I wonder if people are willing to invest their Bitcoin in your securities. How many would actually do so? I am sure that true Bitcoin extremists would not exchange their perfect value storage asset for fiat "tools." Ask yourself: at this point, would you buy Apple stock with your Bitcoin? After all, you have invested in them before. It makes no sense—I give you Bitcoin just for you to turn it into some fiat thing, pay fiat fees, support fiat custodians and third parties, just so you can buy Bitcoin again on the other end.

In the end, I have no evidence, but I am fairly certain you already know everything I am saying in this article/message. While this is written for you, Michael, it is aimed at those who see you as the new Bitcoin Jesus, blindly following you without questioning your actions. They are making reckless bets in their own lives—bets that could make their Bitcoin vanish—lacking the financial security and interest rates you possess. The message they convey does not apply to most people.

Bitcoin is not just another asset or financial tool—it is borderless, permissionless money. Treating it otherwise diminishes its true value. Simply storing it will not bring freedom. Letting Sats flow can build networks. Letting Sats flow can foster collaboration and co-create a better future. Letting Sats flow can strengthen the ecosystem. Save some for tomorrow, but do not become the richest person in the grave—leave them as a plan for continued use later.

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