A letter to Saylor: The true value of Bitcoin lies in circulation, not in hoarding.

Author: Bitcoin Magazine

Compiled by: Wuzhu, Golden 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 mediums of exchange. When you look at the real estate market from one perspective, you see how vast it is, while from another perspective, you see 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 has completely missed the point. The biggest aspect of Bitcoin is its role as a medium of exchange. While the fiat currency system increasingly separates the functions of money, that doesn't mean it should do so. I understand that saying Bitcoin is a medium of exchange is poking a hornet's nest, and all the other currency lords will try to stop Bitcoin. It would be great if they joined in instead of fighting against it. This would convince all billionaires that they can put their 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, being captured.

Without a medium of exchange, there is no value storage! The medium of exchange comes first. You receive a transaction and then store Bitcoin. If value storage is the focus, imagine announcing that you lost the keys to your Bitcoin stack - you can still perfectly store it, but without the functionality of a medium of exchange, the market will erase the fictitious legal value at the top. This value exists precisely because it can be liquid and still serve as a medium of exchange.

Oxygen tanks are crucial for reserves, but breathing is more important. Value storage is secondary and relies on trading capability. Without trading 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 didn't foresee its arrival, but because you couldn't use it as a medium of exchange. Indeed, poor value storage undermines the medium of exchange, but why is the latter prioritized? Because trading capability is key to your ability to respond.

So far, most people who have been in contact with Bitcoin are aware of the chart promoted by Jesse Meyers. You claim that there is no better idea than a clean value store of 9 trillion dollars, 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 dollars, but it is a very poor medium for transactions, with an annual transaction volume of only 1.3 trillion dollars. Regulations and taxes make real estate transactions more difficult. Nevertheless, due to its superiority as a store of value more than 100 times, billionaires favor it, increasingly dominating the market and excluding the younger generation.

A house may be valuable, but its growth in value comes not only from itself, but also from its connection to nearby utilities. Build a road to it, and the value will rise. Add a supermarket or gas station, or connect it to the grid, and the value climbs again. The network creates opportunities for energy to flow into the region, increasing the chances of converting energy into economic value such as money. Therefore, the transactions that take place in the network are the factor that increases the value of the home. But I see the other side: if you're a billionaire and everyone is coveting your resources, you wouldn't want to build a large network around your house. You'll prioritize privacy. The house may depreciate in value, but the goal will shift to raising the cost of other people reaching you, thus reducing the chances of being attacked.

So what about the bond market? Bonds, as a means of storing value, have a value of $300 trillion, with an annual trading volume of $140 trillion and new bond issuance reaching $25 trillion. This means that the value used 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 figures still indicate that people mainly use it as a means of storing value.

Next 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 role as a store of value. Take MicroStrategy stock as an example—you know it better than anyone else. How much value did it store last year, and how much value was traded through it?

The next two parts are very interesting. The annual trading volume in the art industry is extremely small, to the point where it is not even displayed on the charts. Meanwhile, the annual trading volume in the automotive and collectibles industries is close to $4 trillion. This highlights that they are primarily viewed as stores of value 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 fanatically claim that gold has been around for over 5,000 years, calling it the ultimate store of value, for whatever reason – but it only accounts for 1.78% of the store of value market. This suggests that once its medium of exchange role is stripped away, it can be easily captured and manipulated. I'm sorry, gold lovers, but the elf won't be back in the lamp. Gold has a value of $16 trillion, and gold enthusiasts claim that it can store $120 trillion worth of money in it. They are desperate to make a lot of money, but the market disagrees, believing that a flawed fiat currency is ten times higher than a shiny, lifeless rock. So, is gold a better medium of exchange? It trades $54 trillion annually and uses 3.5 times more of its medium of exchange, fueled by derivatives.

Money may not be dominant in terms of a store of asset value, but it is by far the leading medium of exchange. Other value store assets can't even compare. What if the U.S. dollar (the top currency) became a store of value? It will destroy the dollar network, and the value of non-US assets will rise as the network of non-US assets steps in to meet demand. Over time, their store of value assets will rise, while dollar assets will plummet. The total amount of global money is about $120 trillion, but look at the trading volume of the top central banks: Fedwire is about $1,182 trillion, TARGET2 is about $765 trillion, CHAPS is about $145 trillion, and others (partially) are about $500 trillion (conservative estimates due to incomplete data). So, while the store of value is $120 trillion (according to the Jesse chart), these networks are more than 20 times more effective as the medium of exchange, which is about $2.5 trillion. If 2 billion unbanked people were included, what would be the value of the medium of exchange? How many transactions will this trigger? What if microtransactions were possible?

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

Due to the flaws of fiat currency, bonds and stocks are financial "instruments" masquerading as money. This has created a market that prevents most people from protecting their wealth, further dividing the value storage function of currency. But how inclusive are these instruments? Or are they merely tools that siphon value from fiat mediums of exchange, directing it into the hands of privileged individuals, billionaires, and others in need of hoarding?

Globally, only 10-20% of people are exposed to bonds, mainly indirectly through pensions or investment funds, rather than directly. For stocks, 15-25% of the population is accessible. This means that up to 80% of humanity does not have these tools to protect themselves, leaving them vulnerable to exploitation. Separating the store of value from the medium of exchange creates a dynamic of the extractor and the exploited. This amplifies the "Cantilion effect": those who are able to print the medium of exchange buy value store assets, marginalizing 80% or more. It's a feedback loop that weakens the system and widens the gap between the haves and the have-nots. The more money is printed, the weaker the store of value of the currency becomes.

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

Bitcoin doesn't pretend to be money like anything else; it is the first artificial currency that doesn't corrode like a melting ice cube and is non-discriminatory. It is the money of those who choose it. Since there is no printer, no one wants to exchange it for a 'better' store of value — 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, but rather 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. Once again, to store some, someone needs to transfer some in your way first. This is why the wealthy prefer assets that won't disappear like melting ice. Meanwhile, those just starting their careers focus more on acquiring value rather than storing what they do not yet have.

Why do value storage cases 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 must work to increase your savings and persuade others to pay for your goods or services with Bitcoin. Another factor: for most people, their fiat investment portfolio still exceeds their Bitcoin portfolio. They will only consider using Bitcoin to improve their lives when it surpasses their fiat holdings. This shift is not difficult for a large portion of the world that lacks savings or assets. This may explain why the current system refuses to let them exit, instead pushing dependence by providing Bitcoin custody - exchanging one form of dependence for another.

Even rigidity is associated with the need for more medium of exchange. Michael, you're strongly in favor of rigidity, but if Bitcoin isn't used to reach more people, you're dragging it out. Unlike you, the U.S. knows that for the dollar to become the world's reserve currency, they must distribute it widely to lock in network effects. They believe that the network is the key to rigidity, and because of the low cost of printing and sharing bills, it can easily work. In the case of Bitcoin, its absolute scarcity requires a balance between the amount of propagation and storage. That doesn't mean you shouldn't spend a penny, though.

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 who is not worried about hunger, the focus shifts to storing food to prevent spoilage. I have emphasized this point to highlight your bias towards value storage, which distorts your judgment and misleads others.

At this stage of my Bitcoin journey, I am certain of this: chasing money will corrupt you. Bitcoin has changed 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 that situation. However, chasing money is an insatiable bottomless pit. 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 a priority and relegating other things to secondary status—is a mechanism.

You are not establishing a Bitcoin standard - you are stacking a deck of cards. Just like the gold of the past, this time you are hoarding Bitcoin from individuals and institutions, further consolidating 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. On the contrary, you are speculatively striking at those who fund your Bitcoin purchases. You are not only hurting them; by strengthening the dollar, you are also exacerbating the suffering of other currency holders. Hoarding Bitcoin under the watchful eyes of the world? This is not a cyber city - but a closed estate funded by their own money.

I want to know if people are willing to invest their Bitcoin in your securities. How many would actually do it? I'm sure that true Bitcoin extremists would not exchange their perfect store of value asset for fiat "instruments." Ask yourself: at this point, would you buy Apple stock with your Bitcoin? After all, you did invest in them before. It makes no sense – I give you Bitcoin just so you can turn it into some kind of 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 that you already know everything I have said in this article/message. Although this is written for you, Michael, it is aimed at those who see you as the new Bitcoin Jesus, who blindly follow you without questioning your actions. They take reckless bets in their own lives—bets that could turn their Bitcoin into nothing—lacking the financial security and interest rates that you have. The message they convey is not applicable to most people.

Bitcoin is not just another asset or financial instrument - it is a borderless, permissionless currency. Treating it otherwise diminishes its true value. Merely storing it does not bring freedom. Allowing Sats to flow can build networks. Allowing Sats to flow can foster collaboration and co-create a better future. Allowing Sats to flow can strengthen the ecosystem. Save some for tomorrow, but do not be the richest person in the grave - leave them as a plan for continued use in the future.