MicroStrategy chief executive Michael Saylor thinks leading smart contract platform Ethereum (ETH) is a security.
In a new interview with Altcoin Daily, Saylor names all the reasons why he believes Ethereum is a security and not a commodity.
“I think it’s pretty obvious it’s a security. It was issued via an ICO [initial coin launch]. There’s a management team. There was a pre-mine. There’s a hard fork. There are continual hard forks. There’s a difficulty bomb that keeps getting pushed back.”
The MicroStrategy head says that the difficulty bomb, which is designed to increase the difficulty of mining ETH to disincentivize miners, will “wipe out” Ethereum’s mining industry. He also says that Ethereum’s feature to delay the difficulty bomb every six months makes ETH a security and not a commodity.
For it to be a commodity, there can’t be an issuer and the truth is you can’t really make decisions. One of the fundamental insights in the crypto industry is the fact that you can change it is what makes it a security.
If you look at most of these cryptos, where they have hard fork after hard fork after hard fork, the problem with a hard fork is changing the protocol means that some development team is making a decision, and if you can change the protocol in a material way, you can change the monetary protocol. A hard fork can change the issuance pattern, or it can change the value of something. So that makes an investment contract under securities law.”
Ethereum is trading for $1,107 at time of writing. The second-ranked crypto asset by market cap is down almost 4% in the past 24 hours.
