Bitcoin is a lot of things to many people – digital gold, a speculative investment, a technical experiment, a decentralized replacement for fiat money, etc.
But being compared to a central bank is probably the last thing cryptocurrency creator Satoshi Nakamoto expected their creation to be compared to. However, that’s what Strike CEO Jack Mallers says in a new Twitter thread. Is he right?
Jack Mallers makes a remarkable statement about BTC
Jack Mallers is the CEO of Chicago-based BTC payments provider Strike and played a pivotal role in bringing Bitcoin to El Salvador on a large scale. In a new Twitter thread, he compares the top cryptocurrency to a central bank — more specifically, the “central banking system of the internet.”
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The Bitcoin network (often abbreviated to #Bitcoin or simply BTC) is the central banking system of the internet (or internet).
— Jack Mallers (@jackmallers) February 21, 2023
Comparison of Bitcoin with the central bank system
Within the coinbase of the first block in the bitcoin chain is what is known as the genesis block the text “The Times 03/Jan/2009 Chancellor on the brink of second bank bailout”.
The newspaper’s headline refers to ongoing efforts by governments and central banks to save smaller banks from collapse amid the Great Financial Crisis of 2008. During the collapse, British bank Northern Rock sought emergency aid, establishing the country’s first bank in more than 150 years.
Central banks were established for a variety of reasons, including controlling the money supply, inflation, and interest rates. But most importantly, a central bank’s role is that of lender of last resort to prevent the protracted bank runs that preceded the Wall Street Panic of 1929.
Although Bitcoin was created in protest against such policies, which could have dangerous effects over which citizens have no say, central bank bailouts of other banks is exactly what they should be doing. And if that is the purpose of a central bank, is it really correct to call bitcoin the “central banking system of the internet” or to even compare it to a central bank?
BTC versus stock market since the Great Financial Crisis of 2008 | BTCUSD on TradingView.com
Did The Strike CEO get it right?
The answer is yes.” Bitcoin was designed to complement the Internet as an emerging market, freeing it from government control and free from the effects of traditional central bank monetary policies.
Maller’s Twitter thread says the Bitcoin network was created to “alleviate financial crises,” much like central banks are supposed to do. The big difference between Bitcoin and central banks is that government “privilege” cannot increase BTC supply like they can with the current fiat system.
It has now been more than 14 years since the inception of cryptocurrency and the world is bracing for another financial meltdown. Will Bitcoin be ready to save the internet from the next big financial crisis? And do you agree with Jack?
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