Bitcoin maximalist Michael Saylor believes Bitcoin’s ecosystem should welcome everyone and every type of custodial option available.

Cryptocurrency community leaders and members criticized MicroStrategy executive chairman Michael Saylor for comments that seemingly criticized users who self-custody Bitcoin (BTC). Saylor suggested that so-called “crypto-anarchists” solely advocating against institutional safekeeping of digital assets were counterintuitive to Bitcoin’s regulatory security and mass adoption.

The comments attracted scrutiny from Bitcoin proponents like ShapeShift founder Erik Voorhees and crypto developers like Ethereum’s Vitalik Buterin. Buterin, in particular, found Saylor’s comments on custody to be “bat shit insane.”

Without publicly addressing any individual backlash, Saylor’s Oct. 23 post expressed support for the right to choose how assets like Bitcoin should be kept. The post advocated for considering and accepting all available options for BTC custody based on personal preference.

Self-custody has long been a prevailing concept in crypto circles since blockchain’s inception. The entire industry was built on declining trust in legacy institutions and a shift towards separating money from the state.

Fifteen years after Bitcoin’s launch, developments like spot BTC ETFs have ushered in a new era of holding Bitcoin. While many agree that ETFs have encouraged global adoption, calls for self-custody of Bitcoin have never faded away. 

If anything, the conversation around individual custody of assets like BTC has only increased in 2024. Maxis, a term describing believers of a single blockchain asset, relentlessly argue that decentralized crypto storage remains users’ best defense against censorship and centralized failure points.

A government can run a “permanent primary deficit” if it bans or taxes Bitcoin (BTC), according to researchers at the Federal Reserve Bank of Minneapolis.

The Fed researchers ask their readers to imagine an economy “in which the government issues stock and pays a flow of non-negative dividends.”

“If a unit of government stock is used as the numeraire, then the price level in this economy is the price of consumption in units of government stock. And the nominal interest rate is the dividend yield on government stock. Agents in this economy who hold government stock are, in effect, holding a nominal bank account at the Treasury that pays a certain nominal interest rate.”

The researchers note that they use Bitcoin as a metaphor for a private sector security that has a fixed supply and doesn’t offer a claim to any real resources.

“Given a need to finance government purchases equal to a certain fraction of aggregate consumption, the policy that maximizes utility in our economy (and also its growth rate) is for the government to charge very large consumption taxes. This implies very large permanent primary surpluses and a unique equilibrium, and it turns government stock into a very large Lucas tree that eliminates almost all idiosyncratic risk. But large consumption taxes may not be feasible, and then a permanent primary deficit may be the best the government can do, provided the equilibrium does indeed deliver the targeted steady state. To achieve this, the government could simply make Bitcoin illegal.

Our final result says that, short of full prohibition, the government could use a continuous Markov policy and combine it with a tax on Bitcoin.”

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