Michael Saylor Claims On-Chain Proof of Reserves Is “A Bad Idea”

Who is Michael Saylor?

Michael Saylor is the Executive Chairman and Founder of MicroStrategy (now renamed Strategy), a publicly listed software company in the United States, known for its aggressive investment strategy in Bitcoin.

Since 2020, under Saylor's leadership, Strategy has accumulated more than 580,250 BTC, worth approximately $63 billion as of May 2025, becoming the world's largest listed company with a large amount of Bitcoin.

Saylor is considered one of the most ardent Bitcoin advocates, frequently praising Bitcoin's potential as a store of value and a financial instrument for the future.

Context and controversial statement

At the Bitcoin 2025 Conference in Las Vegas, Michael Saylor made headlines when he bluntly stated that the release of on-chain proof-of-reserves (PoR) is “ a bad idea .”

According to Saylor, disclosing wallet addresses to prove Strategy’s Bitcoin holdings — currently stored primarily at third parties like Coinbase Prime and Fidelity — would increase security risks for the company, investors, exchanges, and custodians. He argued:

"Publicizing your wallet address is like publicizing your home address, bank account number, and your child's phone number. It's not only unnecessary, it's dangerous."

Saylor emphasizes that PoR does not provide a complete financial picture, as it only shows assets and does not reflect liabilities. Instead, he suggests that traditional audits from Big 4 firms (like PwC or KPMG) are a safer and more reliable way to verify reserves without exposing sensitive information.

What is on-chain Proof-of-Reserves?

On-chain proof of reserves is a transparency method that allows organizations (such as exchanges or investment funds) to prove that they actually own the reported amount of digital assets by publicly disclosing information related to wallet addresses on the blockchain.

This method often uses techniques such as Merkle-trees or zero-knowledge proofs to verify that an asset exists without revealing sensitive details such as the entire wallet address.

PoR became popular after the collapse of major exchanges such as FTX, Celsius, and BlockFi in 2022, when investors discovered that these companies lacked transparency in managing customer assets.

For example, FTX misused user funds without clear evidence of reserves. Exchanges like Binance, Kraken, and OKX have adopted PoR to rebuild trust, allowing users to verify that reported assets actually exist on the blockchain.

Some companies, like Kraken, also use advanced protocols to enhance security while ensuring transparency.

Michael Saylor's Viewpoint

Saylor's view is well-founded given that Strategy holds a huge amount of Bitcoin, accounting for about 2.7% of the total Bitcoin supply.

Making wallet addresses public could attract hackers, maximum value mining (MEV) attacks, or even personal security threats like executive kidnapping.

Furthermore, he is right to point out that PoR does not fully reflect a company's financial condition, as it does not include information on liabilities – an important factor in assessing liquidity.

Furthermore, recent technological advances, such as zero-knowledge proofs or Merkle trees, have shown that PoR can be implemented securely without revealing the entire wallet address. These solutions seem to contradict Saylor's argument that PoR is " inherently insecure ."

Once again we give our opinion on potential projects in the crypto market. This is not investment advice, consider your portfolio. Disclaimer: The views expressed in this article are solely those of the author and do not represent the platform in any way. This article is not intended to be a guide to making investment decisions.

Compiled and analyzed by HCCVenture

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