Arguably the biggest Bitcoin adoption move of 2020 turned 78,338 off-chain transactions into just 18 on-chain ones, with MicroStrategy praising scalability.
Bitcoin (BTC) as a store of value “scales just fine,” the CEO of the company that just purchased 38,250 BTC has said.
In a tweet on Sep. 17, Michael Saylor revealed more information about MicroStrategy’s dramatic launch into Bitcoin.
Saylor praises Bitcoin as a scalable store of value
Continually making the headlines since its first buy in August, MicroStrategy has now swapped over $400 million of spare capital from USD to BTC.
An interview between Saylor and Morgan Creek Digital co-founder, Anthony Pompliano this week underscored his commitment, having previously been highly skeptical of Bitcoin.
Now, his belief in the technical fundamentals of the network — and its future — is certain. The problem of scaling to meet demand, for example, is a non-issue for Saylor thanks to off-chain transactions.
MicroStrategy’s initial buy-in — 21,454 BTC for $250 million — was a case in point.
“We acquired 21,454 BTC via 78,388 off-chain transactions, then secured it in cold storage with 18 on-chain transactions,” he wrote.
“#Bitcoin scales just fine as a store of value.”
Woo: 2021 may be the year of MicroStrategy Bitcoin trailblazers
Continuing, Saylor described a status quo where on-chain transactions for major investors will remain a rarity:
“If #Bitcoin is treated as a treasury reserve asset, based on our model, 99.98% of all transactions will be off-chain, and assets-at-risk will be in cold storage 99.92% of the time.”
Off-chain transactions via solutions such as the Lightning Network allow Bitcoin transaction volume to increase without adding volume to the blockchain and raising fees to appeal to miners.
In his popular book, The Bitcoin Standard, Saifedean Ammous likewise argues that off-chain activity will become the norm once Bitcoin gains a much larger user base.
That could happen sooner rather than later. Following the Pompliano interview, statistician Willy Woo picked up on Saylor highlighting the world’s 35,000 publicly traded companies that have spare cash reserves of $5 trillion.
“I make out if others follow MicroStrategy’s lead and even just 1% of that capital finds its way into BTC, that’s enough to blow Bitcoin cap to $2T,” he tweeted.
Woo added that given MicroStrategy took six months to approve its shift to Bitcoin, any copycat moves would begin to surface in 2021.
