Bitcoin is a lot of things to many people — digital gold, a speculative investment, a tech experiment, a decentralized replacement for fiat money, etc.
But being compared to a central bank is likely the last thing the cryptocurrency’s 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 Striking Statement About BTC
Jack Mallers is the CEO of Chicago-based BTC payment provider Strike and played a crucial role in bringing Bitcoin broadly to El Salvador. In a new Twitter thread, he compares the top cryptocurrency to a central bank — more specifically, the “central banking system of the internet.”
The Bitcoin Network (often shortened to #Bitcoin, or simply BTC) is the central banking system of the Internet (or internet).
— Jack Mallers (@jackmallers) February 21, 2023
Comparing Bitcoin With The Central Banking System
Within the coinbase of the first block in the Bitcoin chain, the so-called Genesis block contains the text “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
The newspaper headline references ongoing efforts by governments and central banks to save smaller banks from collapse amid the 2008 Great Financial Crisis. During the collapse, UK bank Northern Rock seeking emergency assistance prompted the first bank in the country in more than 150 years.
Central banks were introduced for a variety of reasons — such as controlling money supply, inflation, and interest rates. But most importantly, a central bank’s role is as a lender of last resort, designed to prevent the ongoing bank runs that occurred prior to 1929 Wall Street Panic.
Despite Bitcoin being created in protest to such policies, which could have dangerous effects that citizens have no say in, central banks bailing out other banks is exactly what they’re supposed to do. And if that is purpose of a central bank, is it really accurate to call Bitcoin the “central banking system of the internet,” or compare it to a central bank at all?
Does The Strike CEO Got It Right?
The answer is “yes.” Bitcoin was designed to complement the internet as an emerging economy and bail it out from the control of governments and free from the impact of traditional central bank monetary policies.
Maller’s Twitter thread says that the Bitcoin network was made to “alleviate financial crises”, much like central banks are meant to do. The big difference between Bitcoin and central banks is that government “privilege” cannot increase the BTC supply like they can the current fiat system.
It is now more than 14 years since the cryptocurrency’s inception and the world is bracing for another collapse of the financial system. Will Bitcoin be ready to bail out the internet from the next major financial crisis? And do you agree with Jack?
