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Michael Saylor: The Evolution Path of Bitcoin Lies in Unwavering Commitment

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The essence of Bitcoin is not rapid iteration and starting over but rather steady operation and never crashing. This fundamental difference will define Bitcoin's development path for the next decade.

Source: Bitcoin Evolves by Not Changing
Author: Michael Saylor, Founder of MicroStrategy
Translator: Saoirse, Foresight News

Over the next decade, the most significant development in Bitcoin will not come from frequent changes to the underlying protocol layer, but rather from its increasingly important role across various industries worldwide. The underlying base layer will become more stable, capital markets will continue to deepen, various use cases will expand, institutional investors of all kinds will enter the space, and the entire world will build various systems around Bitcoin.

Bitcoin is not a tech stock, not a payment company, and not a software platform competing by stacking new features. Bitcoin is a monetary network. Its goal is not rapid iteration and starting over but steady operation and never crashing. This fundamental difference will define Bitcoin's development path over the next decade.

Bitcoin is Digital Capital

Bitcoin has already won the first critical battle. More and more people around the globe realize that Bitcoin is digital capital: scarce, durable, portable, divisible, programmable, and capable of global transfers.

The core value proposition of Bitcoin is not to "replace all payment channels" but to "become a neutral, global, scarce value benchmark on which capital, credit, and business activities are based."

The underlying base layer's design was not intended for small everyday payments like buying coffee but for final settlement services. Block space is scarce, relying on energy, cryptography, economic incentive mechanisms, and network-wide consensus to ensure security.

Large asset settlement, corporate treasury reserves, collateral settlement, and final asset ownership transfers should all occur at the base layer. Meanwhile, personal consumption payments, digital banking services, lending, credit products, stable value tools, and various interest-bearing financial products will revolve around Bitcoin, be built on top of Bitcoin, leverage Bitcoin derivatives, or land through channels connected to Bitcoin by institutions.

Bitcoin always stays true to itself, while the world builds myriads of applications on top of it.

The Diminishing Impact of the Four-Year Halving Cycle

The Bitcoin block halving mechanism will always hold significant importance, being a core part of the entire monetary system. Each halving reduces the new circulating supply, further cementing the credibility of Bitcoin's total supply limit of 21 million coins.

However, the influence of the four-year halving cycle on Bitcoin's overall trend will continue to weaken.

Today, Bitcoin has become highly institutionalized and globalized, with ample liquidity and deep integration into the global capital markets. The price dynamics of Bitcoin can no longer be explained simply by the retail-driven narrative as before. While the total supply continues to shrink, there has been a fundamental shift in the demand side structure.

Over the next decade, the price trend of Bitcoin will be less influenced by mining rewards and more determined by various capital flows: ETF fund flows, corporate treasury allocations, sovereign wealth reserves, bank credit funds, derivative trading funds, insurance funds, collateralized funds, structured credit funds, and global savings.

The halving event tightens the supply, while capital flows dictate the long-term growth trend.

In the next phase of Bitcoin adoption, it will not just be more retail investors buying in but various industries beginning to allocate Bitcoin on their balance sheets.

Digital Credit Accelerates Bitcoin Adoption

Bitcoin is digital capital, and digital credit serves as the bridge connecting this digital capital to the global financial system.

The capital markets require maturity matching, yield products, credit tools, collateral assets, tenor transformation, risk management, and various income-generating financial products. Bitcoin itself provides the world with a superior capital vehicle; financial products based on Bitcoin as underlying collateral can allow this digital capital to circulate within the global economy.

Transforming digital capital into digital credit, which then leads to digital currency, digital currency becomes the interface between Bitcoin and the global economy.

This system will not weaken Bitcoin but rather strengthen its value.

Just as the development around gold gave rise to banks, capital markets, credit tools, and settlement systems, significantly enhancing the utility value of gold; and the development around real estate introduced mortgage loans, real estate trusts, asset securitization, insurance, and credit markets, amplifying the financial attributes of real estate; and the stock market saw the emergence of trading platforms, index funds, derivatives, margin trading, and custody networks, expanding liquidity and use cases manifold.

Bitcoin will follow a similar development path, leveraging the global digital network, with a development speed far exceeding the previous examples.

In the next wave of Bitcoin adoption, it will not be limited to individual investors. Individuals, corporations, banks, funds, insurance companies, pensions, sovereign entities, credit markets—all will use Bitcoin as a capital asset.

Various Interfaces Will Become the Main Battlefield of Industry Competition

Everyone acknowledges Bitcoin's unique value proposition, but each person interacts with Bitcoin differently.

Some people self-custody their private keys, some hold Bitcoin ETFs, some hold Bitcoin through banks, some corporate entities hold Bitcoin on their balance sheets, some use Bitcoin as collateral, some hold credit products collateralized by Bitcoin, and some use digital currencies issued on top of the Bitcoin credit system.

All the aforementioned interaction channels hold value but differ fundamentally. Self-custody of private keys secures asset sovereignty; institutional custody reduces barriers to entry for the average person; ETFs simplify asset allocation processes; banks create credit products based on Bitcoin; enterprises issue related securities; miners safeguard network security; full nodes enforce underlying rules; and holders facilitate capital allocation.

The core contradiction in the industry for the next decade does not lie in whether Bitcoin can survive—it has already established a solid foundation. The real contradiction is whether all the financial exposures linked to Bitcoin in the market correspond to real Bitcoin assets or if the global financial system will arbitrarily create a large amount of "paper Bitcoin" without underlying assets.

Custodial mechanisms, asset transparency, reserve proof, risk management, capital structure, and counterparty risk are all paramount.

Even though the peripheral financial system breeds a large amount of leverage and opacity issues, leading to periodic crises, the Bitcoin base protocol remains robust. Bitcoin cannot prevent human operational errors, it only clearly exposes various risks to the market.

The Threshold for Base Layer Protocol Changes Will Continue to Rise

Bitcoin's "immune system" is its rigorous network-wide consensus mechanism. This is not its weakness but rather the core source of Bitcoin's value.

Transaction fees determine block space usage costs; full nodes establish network rules; miners are responsible for block validation; holders allocate capital resources; any changes to the base protocol require unanimous consensus among the vast majority of the network participants.

The most important feature of Bitcoin is not its ease of upgrade and iteration but its immutability.

In the next decade, the Bitcoin base layer will become more conservative, and protocol changes will require stronger evidence. Any proposals for modifications that would introduce systemic risks, weaken decentralization, compromise monetary rule integrity, expand the attack surface, or cause unforeseeable negative consequences will face network-wide resistance.

This trend towards conservatism is a positive development for the entire network. Improvement proposals with flaws should be rejected before being implemented as protocol changes.

Innovation will not stagnate but will shift entirely to the peripheral ecosystem: wallets, custody services, Lightning Network, sidechains, layer-two protocols, institutional settlement systems, collateral systems, digital credit, and the digital currency space will all continue to innovate and iterate.

At the underlying layer, it will become the ultimate vehicle for global asset settlement.

The future of Bitcoin depends on whether the global market can innovate around it while not compromising the underlying protocol itself.

The Mining Industry Will Transform into Global Energy Infrastructure

The Bitcoin mining industry will become more professionalized and institutionalized, deeply integrated with the global energy market.

Mining serves as the link between digital security and physical energy, converting electricity into network security for the currency and creating a globally scalable energy consumption market that can be flexibly located, shut down on demand, and governed by economic principles.

The core competitiveness of top mining enterprises will no longer solely rely on high-performance mining machines but also on holding high-quality power contracts, a robust capital structure, a mature reserve fund strategy, stable grid partnerships, and the ability to monetize power resources during sharp energy price fluctuations.

As block rewards continue to decrease, the importance of transaction fees will rise, increasing the value of block space. The mining industry will shift from a niche geeky tech race to a strategically important industry linked with energy infrastructure and capital markets.

Bitcoin mining not only secures the network but also stabilizes energy demand, utilizing idle and stranded energy resources, while driving global discussions on the deep interconnection between currency and energy.

Existing Risks Are Real and Cannot Be Ignored

The biggest risk to Bitcoin is not its complete disappearance.

There are five core risks: protocol upgrades with vulnerabilities that could compromise the underlying protocol, custody solutions blurring real asset reserves, high leverage distorting Bitcoin pricing, and various national regulatory bodies controlling Bitcoin on-ramps and off-ramps:

First, disruption of the underlying protocol. The integrity of the Bitcoin monetary system relies on strict consensus maintenance, with protocol changes needing to be very rare, undergo comprehensive scrutiny, and garner overwhelming support from the network to be implemented.

Second, widespread paper Bitcoin. If the total amount of Bitcoin IOUs issued by intermediaries far exceeds the actual circulating Bitcoin quantity, the market could experience periodic credit crises. While the underlying protocol itself may not collapse, investors would suffer massive losses due to high leverage, lack of transparency, and overcollateralization.

Third, the trend toward centralized custody services. If the vast majority of users hold Bitcoin through a few banks, exchanges, funds, or apps, Bitcoin's scarcity remains intact, but user access channels remain restricted, facing pervasive permissioned controls.

Fourth, regulatory capture risk. While governments cannot alter Bitcoin's underlying code, they can regulate exchanges, brokers, custodians, miners, banks, tax reporting, and energy access, among other upstream and downstream components.

Fifth, there is uncertainty in the development of the fee market. After the continuous decrease in block subsidies, Bitcoin needs a set of long-term stable, high-value fee market to support the long-term security of the network. I believe that when Bitcoin becomes a global mainstream settlement collateral, this fee market will take shape, but the development process will not be smooth.

All the above risks will not cause Bitcoin to fail completely, but they simply indicate the core challenges that the industry will need to address in the future.

Outlook for the Next Decade

By 2036, I expect the range of Bitcoin holders to be broader, institutional participation to be deeper, increased global political influence, deep integration into the global financial system, and all network participants will more actively defend Bitcoin's underlying rules.

It will become a global digital capital target; a reserve asset for individuals, enterprises, funds, banks, and sovereign entities of various countries; the most core collateral asset in the digital credit market; completing final settlement of large asset transactions relying on the underlying layer; a value anchor for various types of digital currencies; supporting a complete ecosystem of expanding credit, yield products, derivatives, insurance, custody, and structured finance products.

However, the degree of change to the underlying base protocol will be far less than all the applications and financial systems built around it. This is the paradox of Bitcoin.

The world needs digital capital, digital credit, and will continue to drive a significant demand for digital currencies, with the global market building an entirely new financial system around Bitcoin.

But Bitcoin's mission itself is not to encompass all financial functions. The core mission of Bitcoin is to become that immutable cornerstone of value.