Article author: Abhaya Anil Article translation: Block unicorn

For many years, Bitcoin believers have predicted the birth of Bitcoin banks. Now, this prophecy is becoming a reality. Under Michael Saylor, MicroStrategy is laying the foundation for becoming the world's first Bitcoin bank - a move that could permanently reshape the financial system. If you have been paying attention, the clues have been laid long ago.

Hal Finney's Prophecy: The Origin of Bitcoin Bank

More than a decade ago, Hal Finney, one of the earliest adopters of Bitcoin, predicted that Bitcoin banks will become an inevitable product of ecological development.

He foreseeed that although Bitcoin is the underlying protocol for decentralization, most people will not keep their assets on their own. Instead, financial institutions will provide Bitcoin-based banking services, just as traditional banks operate on gold reserves. Today, this vision is being realized by MicroStrategies.

Michael Sailer's layout: A glimpse of clues from past conversations

Saler has always been committed to integrating Bitcoin into the strategic layout of the global financial system. Two months ago, he hinted at the bitcoin earnings opportunity and how sovereign financial institutions could include bitcoin on their balance sheet in conversation with economist Saifedean Ammous on the podcast "The Four-Year Cycle of Bitcoin." He also pointed out that it is difficult for ordinary individuals to make profits by self-supporting Bitcoin, while large financial institutions can use resources to develop Bitcoin financial products.

Seller further confirmed this view in another interview on December 11. He discussed banking giants such as JPMorgan Chase and Goldman Sachs, which were once hostile to Bitcoin, are now planning to hold, trade and custody businesses of Bitcoin.

As traditional banks enter this field, competition for Bitcoin liquidity will intensify. Ultimately, traditional financial institutions will be forced to integrate Bitcoin into their services to maintain relevance.

Bitcoin Banking Revolution: Why is it unstoppable?

1. Bitcoin as original collateral

Bitcoin is the hardest currency in human history, and banks want to join in. Unlike fiat currencies that can be printed indefinitely, Bitcoin’s fixed supply makes it the perfect collateral. Sailer has repeatedly stressed that elite families such as the Rothschild family have maintained wealth for centuries by never selling their core assets.

The same principle applies to Bitcoin. Future Bitcoin banks will allow users to borrow instead of selling on the assets they hold, allowing long-term holders to retain wealth while gaining liquidity.

2. Battle between block space and mining rights

Once banks start holding Bitcoin, they will inevitably compete for the right to process transactions. Why? Because block space is limited. Currently, each Bitcoin block can accommodate an average of 4,094 transactions, meaning competition for block inclusion will become fierce. Financial institutions that rely on instant high-value transfers will require priority access.

This may lead institutions to start building their own mining farms to monopolize computing power in order to ensure high-value transfers are preferred, thereby further centralizing Bitcoin mining rights.

3. Banking applications of side chains and Layer 2

Because the basic layer of Bitcoin is inefficient and cannot be adopted on a large scale (it takes more than 100 years to directly allow global population adoption), an alternative solution is needed. Banks may take advantage of Bitcoin sidechains such as Liquid, which can speed up transactions while maintaining a high degree of decentralization. In addition, joint models such as Fedimint may also appear, ensuring that Bitcoin can be scaled to billions of users.

The role of stablecoins and asset tokenization

Saylor and other industry leaders discussed how tokenized assets, especially stablecoins, will play a key role in Bitcoin banking. Imagine a financial ecosystem where Bitcoin supports stablecoins, just as Treasury bonds support traditional fiat currencies. This will allow seamless integration into the financial system while ensuring that Bitcoin remains the underlying reserve asset.

Implications for investors

Bitcoin interest-generating products are coming: institutions will launch Bitcoin earnings products, but they must be vigilant about the sources of risks.

Bank custody becomes standard: Whether it is JPMorgan Chase, Goldman Sachs or Micro-Strategy, Bitcoin custody will become standard for banking business.

Institutional mining: In order to ensure transactions are on the chain, banks will make a big move into Bitcoin mining.

Expandation of side chains and Layer 2: Bitcoin Bank will rely on technologies such as Liquid and Lightning Network to expand services.

Conclusion

The integration of Bitcoin into traditional finance is no longer a question of whether or not, but a question of when. Micro-strategy companies lead this trend and lay the foundation for the future where Bitcoin banks become the norm. As this shift unfolds, Bitcoin holders must adapt and understand future opportunities and risks.

Are we witnessing the birth of a financial system based on Bitcoin? At least Seal believed it, and he bet on billions of dollars.