HomeWinBuzzer NewsWill Microsoft Invest in Bitcoin? Shareholders Push for Vote to Find Out

Will Microsoft Invest in Bitcoin? Shareholders Push for Vote to Find Out

As Microsoft shareholders prepare to vote on a Bitcoin investment proposal, the board resists, citing Bitcoin’s volatility and outlining the company’s cautious approach to crypto.

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Microsoft’s board is urging shareholders to vote against a proposal to add Bitcoin to its balance sheet in a decision set for December 9. The National Center for Public Policy Research, a conservative think tank advocating for the proposal, argues that Bitcoin investment would protect Microsoft against economic shifts. Microsoft’s board, however, points to the high volatility of cryptocurrencies and asserts that current asset diversification strategies are sufficient.

From Bitcoin Support in Excel to Azure Blockchain

Microsoft’s engagement with Bitcoin traces back years. In early 2017, the company announced Bitcoin functionality in Excel, allowing users to format and analyze Bitcoin data within spreadsheets on various operating systems, including Windows and macOS.

According to a Microsoft executive, this move aimed to serve both consumer and enterprise needs. While the news was welcomed by Bitcoin enthusiasts, some users criticized Microsoft for lagging behind Google, which had already integrated Bitcoin data tracking in Google Sheets.Microsoft’s board is urging shareholders to vote against a proposal to add Bitcoin to its balance sheet in a decision set for December 9. The National Center for Public Policy Research, a conservative think tank advocating for the proposal, argues that Bitcoin investment would protect Microsoft against economic shifts. Microsoft’s board, however, points to the high volatility of cryptocurrencies and asserts that current asset diversification strategies are sufficient.

From Bitcoin Support in Excel to Azure Blockchain

Microsoft’s engagement with Bitcoin traces back years. In early 2017, the company announced Bitcoin functionality in Excel, allowing users to format and analyze Bitcoin data within spreadsheets on various operating systems, including Windows and macOS.

According to a Microsoft executive, this move aimed to serve both consumer and enterprise needs. While the news was welcomed by Bitcoin enthusiasts, some users criticized Microsoft for lagging behind Google, which had already integrated Bitcoin data tracking in Google Sheets.

Beyond Excel, Microsoft explored blockchain integration more deeply through its Azure Blockchain Service, part of “Project Bletchley.” This Blockchain-as-a-Service (BaaS) allowed organizations to create and manage blockchain networks securely, catering primarily to enterprise clients.

Azure Blockchain was launched in 2015 as a Blockchain as a Service (BaaS). Microsoft spend several years backing the service with partnerships and updates. That included the launch of Blockchain Tokens at Ignite 2019. At the same event, Microsoft expanded its Azure Blockchain Service with Blockchain Data Manager. However, the service was shut down in 2021. 

Blockchain operates as a decentralized ledger, storing verified transaction data in “blocks,” which can enhance trust and transparency in various applications. Microsoft’s service specifically aimed to simplify blockchain use for developers, reducing the technical hurdles of blockchain setup.

Bitcoin Payments and Identity Network: An Experimental, Reserved Stance

Consumer-facing Bitcoin integration also extended to payments. Since 2014, Microsoft has accepted Bitcoin as a payment option for content on Xbox and Windows stores. However, a 2016 Microsoft website post mistakenly stated that Bitcoin support had ended, sparking confusion. Microsoft quickly corrected the information, reaffirming its support for Bitcoin in select purchases, attributing the error to a posting oversight.

In 2020, Microsoft took blockchain adoption a step further by launching the Identity Overlay Network (ION), a decentralized identity system developed on the Bitcoin blockchain. ION allows users to manage and verify identities without relying on traditional username and password systems, aligning with a broader industry move toward decentralized identity solutions. ION’s use of Bitcoin’s blockchain enables a privacy-focused identity verification system that reduces dependence on central authorities.

Crypto Mining Ban on Azure and Rising Market Tensions

Microsoft’s relationship with Bitcoin remains complex, especially as regulatory scrutiny and environmental concerns around cryptocurrencies intensify. In December 2022, Microsoft updated its Universal License Terms for Online Services to block cryptocurrency mining on its cloud services, including Azure.

“The Acceptable Use Policy has been updated to explicitly prohibit mining for cryptocurrencies across all Microsoft Online Services unless written pre-approval is granted by Microsoft," Microsoft states in its updated TOC's."We suggest seeking written pre-approval from Microsoft before using Microsoft Online Services for mining cryptocurrencies, regardless of the term of a subscription.”

Crypto mining requires significant computational resources and can increase energy costs, leading Microsoft to prioritize cloud security and sustainability by prohibiting this activity unless given explicit pre-approval. The decision reflects a cautious stance toward crypto, emphasizing responsible cloud resource use while acknowledging the unique demands of mining.

Tesla’s $1.5 Billion Bitcoin Investment Fuels Speculation on Microsoft

Tesla’s headline-making decision to invest $1.5 billion in Bitcoin in early 2021 reignited conversations about corporate crypto investments. The automaker’s purchase sparked a 16% increase in Bitcoin’s value, and industry experts speculated that other major companies might follow suit. Analyst Dan Ives noted Tesla’s decision could drive a “ripple effect” in corporate adoption of Bitcoin. Microsoft, however, remained noncommittal, even as crypto advocates speculated that it might eventually embrace similar investments.

Satya Nadella, Microsoft’s cloud-focused CEO, has prioritized blockchain technology but refrained from pursuing direct Bitcoin investments. Microsoft founder Bill Gates has also openly criticized Bitcoin, calling it a “greater fool theory” investment with no productive value, casting further doubt on the likelihood of Microsoft following Tesla’s lead.

Shareholders Push Back: A Test of Microsoft’s Conservative Crypto Stance

Despite Microsoft’s continued involvement with blockchain and Bitcoin technology, the upcoming shareholder vote represents a push to formalize Bitcoin as part of Microsoft’s corporate investment strategy. The proposal from the National Center for Public Policy Research suggests that Bitcoin could offer protection in an unpredictable market environment, though Microsoft’s board has advised against it.

Should Microsoft’s shareholders vote in favor, it would set the company on a new trajectory as the largest U.S. tech firm to hold Bitcoin as a treasury asset. If rejected, it would affirm Microsoft’s cautious approach, aligning with a longstanding strategy of using blockchain technology in applications but keeping volatile assets like Bitcoin at arm’s length.

Beyond Excel, Microsoft explored blockchain integration more deeply through its Azure Blockchain Service, part of “Project Bletchley.” This Blockchain-as-a-Service (BaaS) allowed organizations to create and manage blockchain networks securely, catering primarily to enterprise clients.

Azure Blockchain was launched in 2015 as a Blockchain as a Service (BaaS). Microsoft spend several years backing the service with partnerships and updates. That included the launch of Blockchain Tokens at Ignite 2019. At the same event, Microsoft expanded its Azure Blockchain Service with Blockchain Data Manager. However, the service was shut down in 2021

Blockchain operates as a decentralized ledger, storing verified transaction data in “blocks,” which can enhance trust and transparency in various applications. Microsoft’s service specifically aimed to simplify blockchain use for developers, reducing the technical hurdles of blockchain setup.

Bitcoin Payments and Identity Network: An Experimental, Reserved Stance

Consumer-facing Bitcoin integration also extended to payments. Since 2014, Microsoft has accepted Bitcoin as a payment option for content on Xbox and Windows stores. However, a 2016 Microsoft website post mistakenly stated that Bitcoin support had ended, sparking confusion. Microsoft quickly corrected the information, reaffirming its support for Bitcoin in select purchases, attributing the error to a posting oversight.

In 2020, Microsoft took blockchain adoption a step further by launching the Identity Overlay Network (ION), a decentralized identity system developed on the Bitcoin blockchain. ION allows users to manage and verify identities without relying on traditional username and password systems, aligning with a broader industry move toward decentralized identity solutions. ION’s use of Bitcoin’s blockchain enables a privacy-focused identity verification system that reduces dependence on central authorities.

Crypto Mining Ban on Azure and Rising Market Tensions

Microsoft’s relationship with Bitcoin remains complex, especially as regulatory scrutiny and environmental concerns around cryptocurrencies intensify. In December 2022, Microsoft updated its Universal License Terms for Online Services to block cryptocurrency mining on its cloud services, including Azure.

“The Acceptable Use Policy has been updated to explicitly prohibit mining for cryptocurrencies across all Microsoft Online Services unless written pre-approval is granted by Microsoft,” Microsoft states in its updated TOC’s.”We suggest seeking written pre-approval from Microsoft before using Microsoft Online Services for mining cryptocurrencies, regardless of the term of a subscription.”

Crypto mining requires significant computational resources and can increase energy costs, leading Microsoft to prioritize cloud security and sustainability by prohibiting this activity unless given explicit pre-approval. The decision reflects a cautious stance toward crypto, emphasizing responsible cloud resource use while acknowledging the unique demands of mining.

Tesla’s $1.5 Billion Bitcoin Investment Fuels Speculation on Microsoft

Tesla’s headline-making decision to invest $1.5 billion in Bitcoin in early 2021 reignited conversations about corporate crypto investments. The automaker’s purchase sparked a 16% increase in Bitcoin’s value, and industry experts speculated that other major companies might follow suit. Analyst Dan Ives noted Tesla’s decision could drive a “ripple effect” in corporate adoption of Bitcoin. Microsoft, however, remained noncommittal, even as crypto advocates speculated that it might eventually embrace similar investments.

Satya Nadella, Microsoft’s cloud-focused CEO, has prioritized blockchain technology but refrained from pursuing direct Bitcoin investments. Microsoft founder Bill Gates has also openly criticized Bitcoin, calling it a “greater fool theory” investment with no productive value, casting further doubt on the likelihood of Microsoft following Tesla’s lead.

Shareholders Push Back: A Test of Microsoft’s Conservative Crypto Stance

Despite Microsoft’s continued involvement with blockchain and Bitcoin technology, the upcoming shareholder vote represents a push to formalize Bitcoin as part of Microsoft’s corporate investment strategy. The proposal from the National Center for Public Policy Research suggests that Bitcoin could offer protection in an unpredictable market environment, though Microsoft’s board has advised against it.

Should Microsoft’s shareholders vote in favor, it would set the company on a new trajectory as the largest U.S. tech firm to hold Bitcoin as a treasury asset. If rejected, it would affirm Microsoft’s cautious approach, aligning with a longstanding strategy of using blockchain technology in applications but keeping volatile assets like Bitcoin at arm’s length.

Last Updated on November 7, 2024 2:21 pm CET

SourceSEC
Luke Jones
Luke Jones
Luke has been writing about Microsoft and the wider tech industry for over 10 years. With a degree in creative and professional writing, Luke looks for the interesting spin when covering AI, Windows, Xbox, and more.

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