A Letter to Saylor: The True Value of Bitcoin Lies in Its Circulation

Source: Bitcoin Magazine; Translated by Wuzhu, Golden Finance

Michael Saylor, you're forced to realize that all store of value assets are flawed and force you to focus on the only one that isn't. This does not mean that you are immune to the situation of the medium of exchange. When you look at the real estate market from one angle, you see how huge it is, and how scary it is from another angle. But if you're experiencing pain that forces you to maintain billions of dollars in purchasing power, housing is a nice tool.

Your obsession with SoV is completely off target. The biggest aspect of Bitcoin is as a medium of exchange. While fiat currency systems increasingly separate the functions of money, that doesn't mean it should be that way. 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 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 is paramount. You receive a transaction and then store Bitcoin. If value storage is the focus, imagine announcing that you lost the keys to your stack of Bitcoin— you can still perfectly store it, but without the functionality of a medium of exchange, the market will erase the top-layer fictional fiat value. This value exists precisely because it can be liquid and still serves as a medium of exchange.

Oxygen tanks are crucial for storage, but breathing is more important. Value storage is secondary and depends on trading ability. Without trading ability, 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 ability is key to your ability to react.

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So far, most people who have come into contact with Bitcoin know about the chart promoted by Jesse Meyers. You claim that there's no better idea than a clean value storage 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 of exchange, with an annual transaction volume of only 1.3 trillion dollars. Regulations and taxes make real estate transactions more difficult. Nevertheless, because it is over 100 times better as a store of value, billionaires favor it, increasingly dominating the market and excluding the younger generation.

A house may be very valuable, but its value growth comes not only from itself but also from its connection to nearby utilities. Building a road to it will increase its value. Adding a supermarket or gas station, or connecting it to the power grid, will again boost its value. The network creates opportunities for energy to flow into the area, increasing the chances of converting energy into economic value (like money). Therefore, the transactions occurring within the network are factors that increase the value of the house. But I see another side: if you are a billionaire and everyone is coveting your resources, you wouldn’t want a large network built 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.

So what about the bond market? Bonds, as a means of value storage, are valued at 300 trillion dollars, with an annual trading volume of 140 trillion dollars and new bond issuances amounting to 25 trillion dollars. 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 housing, but the figures still indicate that people primarily use it as a means of value storage.

Next up is 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. How much value did it store last year, and how much value was traded through it?

The next two sections are very interesting. The annual trading volume in the art industry is very small, so small that it doesn't even show up on the chart. Meanwhile, the annual trading volume in the automotive and collectibles industry approaches $4 trillion. This highlights that they are primarily viewed as a store 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 fit into all of this? The mainstream narrative is urging holders to never sell, positioning Bitcoin as a store of value. The market, however, tells a different story. In 2024, Bitcoin's market cap will reach $2 trillion, while the value of transactions on its first layer, the blockchain, will reach $3.4 trillion. Considering the Lightning Network (although its exact numbers are still elusive), the total could be closer to $4 trillion. This suggests that Bitcoin's role as a medium of exchange is twice as good as its store of value. So what happens if the long-standing "hold forever" propaganda narrative begins to fade? **

Due to the flaws in fiat currency, bonds and stocks are financial "instruments" that pretend to be money. This creates a market that prevents most people from protecting their wealth, further dividing the value storage function of money. 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 who need to hoard?

Globally, only 10-20% of people have access to bonds, primarily through pensions or investment funds indirectly, rather than direct access. 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 mediums of exchange creates a dynamic of exploiters and the exploited. This amplifies the "Cantillon Effect": those who can print mediums of exchange purchase value storage assets, marginalizing 80% or more of the population. This 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 currency's value storage function becomes.

Another very important part of the overall system is the expense. There is a fee for sending dollars through the banking system, which is a service, but how much does it cost when you want to switch from a medium of exchange to a store of value instrument? Much more. This creates so much friction throughout the system and causes the poor to be unable to store their value. At this point, the medium of exchange is increasingly becoming a medium of extraction, rather than a medium of exchange. This is also why the store of value case is more attractive in a statutory system.

Bitcoin doesn't pretend to be money like anything else; It is the first artificial currency that does not corrode like melted ice and does not discriminate. It is the money of those who choose it. Since there is no printer, no one wants to trade it for a "better" store of value – there is no second best. Even people who don't have Bitcoin can use it to shape the life they want. Instead of chasing money to store something, they build anything on top of Bitcoin that can enrich their lives.

The most important idea is not to store value, but to transfer it. But to transfer value, you first need to store some. Again, to store some, someone needs to move some your way first. That's why the rich prefer assets that don't drain like melted ice. At the same time, those who are just starting out in their careers are more focused on gaining value than stocking up on what they don't already 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 have to 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 it to improve their lives when Bitcoin exceeds their fiat holdings. This shift is not difficult for the majority of the world’s population that lacks savings or assets. This may explain why the current system refuses to let them exit, instead pushing dependence by offering Bitcoin custody – exchanging one 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 analogy 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 fat can be stored. 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 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 stops 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 for that 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 other things to secondary importance—is a mechanism.

You are not establishing a Bitcoin standard – you are hoarding a deck of cards. Just like gold in the past, this time you are accumulating Bitcoin from individuals and institutions, further solidifying the fiat standard. Saylor, you are not attacking the dollar as some believe – you are supporting it by enhancing your stock and its ecosystem. On the contrary, you are speculatively striking against those who fund your Bitcoin purchases. You not only hurt them; by strengthening the dollar, you also exacerbate the pain of other currency holders. Hoarding Bitcoin under the watchful eyes of the world? This is not a cyber city – but a closed manor 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 so? I’m sure that real Bitcoin extremists wouldn’t trade their perfect store of value for fiat “instruments.” 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 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 am saying in this article/message. Although 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 disappear – lacking the financial security and interest rates that you have. The message they convey does not apply to most people.

Bitcoin is not just another asset or financial tool — it is a borderless, permissionless currency. 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 cooperation 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 — keep them for plans to use later.