Michael Saylor’s Bold Stance: Proof of Reserves is a ‘Bad Idea’ – Here’s Why

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  • Michael Saylor boldly declares that the current ‘proof of reserves’ is not only insecure but a ‘bad idea’ for institutions.
  • The crypto community? Not impressed. They’ve dubbed his PoR stance a ‘major red flag.’

Ah, Michael Saylor—always the provocateur. This time, he’s come out swinging against the popular trend of proof of reserves (PoR) for his company, Strategy (formerly MicroStrategy), and its Bitcoin holdings. While everyone else seems to be hopping on the PoR bandwagon, Saylor scoffs at the notion, dismissing it as a “bad idea” and, to put it bluntly, a security nightmare.

Speaking at the Bitcoin Conference in Las Vegas, Saylor took the stage and pulled no punches. He declared that the current system for publishing proof of reserves is akin to inviting disaster. “The current, conventional way of publishing proof of reserves is insecure,” he stated, making it clear he was not afraid to ruffle feathers. “It actually dilutes the security of the issuer, custodians, exchange, and investors.” Well, that’s one way to say, “Trust me, I know better than you.”

“It’s not a good idea, it’s a bad idea, like publishing the address, bank accounts, and phone numbers of your kids and thinking it’ll make your family better.”

Yikes! That’s a bit extreme, don’t you think? Yet, he wasn’t done there. According to Saylor, PoR in its current form is a fool’s errand—he argues it’s meaningless without the audited liabilities of institutions. In his eyes, only firms audited by the Big 4 (PWC, KPMG, etc.) could provide a secure and reliable crypto reserve attestation. Now, where have we heard the term “Big 4” before? Ah, yes, the same firms that can barely keep their own houses in order…

Mixed Reactions: The Crypto Community Isn’t Buying It

But of course, the crypto world doesn’t exactly agree with Saylor’s musings. Most of the X crypto community raised an eyebrow (or two). Whale Panda, the ever-vocal crypto personality, didn’t mince words. He called Saylor’s position a “major red flag.”

“Talking about a major red flag. He compares it to publishing bank accounts and phone numbers…The whole point of Bitcoin is its transparency.”

Another market watcher, Pledditor, threw their two cents into the mix, adding:

“PoR may compromise your privacy (and there is a valid list of criticisms about that), but it overall does NOT compromise the security of your coins. Saylor either has something to hide, or he’s completely ignorant about how Bitcoin works.”

Oh, the drama! In reality, the rise of PoR as a concept gained momentum after the catastrophic implosion of FTX in 2022, following the devastating misappropriation of customer funds. That’s when major exchanges, like Kraken, rushed to publish their own PoR to prove their transparency (and, let’s be honest, to calm the public’s nerves). The whole industry seemed to agree that transparency was key. But wait—hold on—does that mean we should risk compromising privacy in the name of transparency? Saylor sure doesn’t think so.

The tension between transparency and security is a delicate one. Saylor’s critics, though, couldn’t resist pointing out that his privacy concerns might be a convenient excuse to dodge scrutiny. Hmm… I smell a hint of hypocrisy in the air. 🤔

Speaking of the numbers, let’s not forget Strategy now owns a jaw-dropping 580,250 BTC, which amounts to 2.7% of the total supply. That’s worth a hefty $63.46 billion at current prices. But, of course, the firm acquired this stash for a “mere” $40 billion. So, Saylor’s sitting pretty on a whopping $22 billion in unrealized profit. Not bad, right?

But here’s the catch: Arkham, the tracking service, has only managed to confirm $35 billion of those BTC holdings. Hmm, curious. And don’t forget that Saylor has repeatedly said he won’t be selling any of those Bitcoin holdings anytime soon. In fact, he plans to “always buy the top.”

Now, if any sell-off, breach, or bankruptcy were to occur at Strategy, it could very well send shockwaves through the market, dragging Bitcoin—and maybe even the entire crypto ecosystem—down with it. If you haven’t yet realized, there’s a lot riding on Saylor’s next move.

Oh, and for those interested in the performance of Strategy’s stock, MSTR, it closed May 26 at a modest $269, reflecting a 7.5% loss. What a shocker, right? And this loss conveniently tracks with Bitcoin’s price fluctuations above $106K. A thrilling saga, indeed.

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2025-05-27 14:19