Saylor speaks against Ethereum again, supporting an argument that the DeFi King could crash as Terra did in May.
MicroStrategy founder Michael Saylor in a tweet yesterday, has thrown his weight behind an argument that Ethereum risked crashing like Terra.
The comments from Saylor came in response to a YouTube video from fellow Bitcoin maximalist Matthew R. Kratter. In the video shared with his 190k subscribers, Kratter argued that Ethereum’s proof-of-stake consensus mechanism makes it vulnerable to a Terra-like collapse. Kratter asserts while staked ETH protects the network, if prices drop lower and validators capitulate and pull out their stake in a protocol-level bank run, the network could effectively collapse.
“The lower Ethereum’s price falls, the more people will choose to unstake their coins, which further erodes Ethereum’s security and could lead to a death spiral,” Kratter wrote in the video description. “Regulators need to look into whether proof of stake protocols like Ethereum and Cardano are at risk of catastrophic implosions like Terra Luna.”
Saylor, in support, surmises Kratter’s arguments and describes PoS protocols as “inherently unstable, inefficient, opaque, and risky due to their fragile design.” In contrast, he touts Bitcoin as stable, strong, and increasingly secure.
#Bitcoin is engineered to be stable, robust, and increasingly secure & efficient over time based on Proof of Work and ASIC technology advances. Proof of Stake protocols are inherently unstable, inefficient, opaque, and risky due to their fragile design. https://t.co/j9FWNIH3MP pic.twitter.com/ZVq086tvfw
— Michael Saylor⚡️ (@saylor) December 14, 2022
It is worth noting that it is not the first time the Bitcoin evangelist has thrown a jab at Ethereum and other altcoins. Instead, as highlighted by several users in the comments, the MicroStrategy chief has made a habit of doing so much to the irritation of Ethereum supporters. Saylor asserting that Ethereum is security, recently argued that the Ethereum staking contract constitutes an investment contract, urging the US Securities and Exchange Commission to “pretty much shut down all of it.”
The Bitcoin evangelist continues to champion the narrative that Bitcoin is the only “ethical” crypto asset and a superior inflationary hedge. On the back of this belief, MicroStrategy, under his administration, has made a $4 billion bet on Bitcoin, accumulating 130k BTC in about two years at an average price of over $30k. The billionaire remains unfazed despite the bet being over $1.6 billion in the red at current prices.
Unsurprisingly, his latest statements have attracted flak from the Ethereum community, with holders pointing out flaws in Bitcoin’s proof-of-work model or highlighting its lack of programmability. However, for maximalists, Bitcoin’s rarely changing code is a strength, not a weakness.