While the US is witnessing one of the biggest banking collapses in its history, Bitcoin is innovating and seeing the network grow.
This is an editorial opinion by Carlos Cardenas, an institutional account manager who has worked in legacy banks and cryptocurrency exchanges.
Writer Nassim Taleb published an interview titled, “Bitcoin Is The Detector Of Imbeciles” in which he reiterated his argument that bitcoin cannot play the role of currency or store of value and indicated that it will “collapse.” But is this true?
Of course, bitcoin has experienced a decline in value over the past ten years, including 58% last year, but overall, the annual average value of 1.576% between 2010 and 2021. Through the evolution of Bitcoin, we have seen a developing global network of miners emerge and through one million active addresses. Thanks to Bitcoin, we now see a growing crypto economy including cryptocurrencies and other digital assets (utility tokens and NFTs) valued at over $1 trillion. Through all the innovations and even the negative events associated with Bitcoin (bans, confiscations, scams, scams, etc.), Bitcoin and its user base have adapted and won.
Meanwhile, the recent collapse of financial institutions like SVB, Silvergate Bank and Signature Bank has once again highlighted the fragility of the legacy financial system. We have witnessed the systematic destruction of wealth through debasement and inflation fueled by traditional financial systems, bad actors and poor policy making in our lifetimes.
If you remember 2008, 1999 or 1987, or have been paying attention now, you have been aware of all these problems for some time, but you know there was no real alternative until Satoshi Nakamoto created Bitcoin.
The strength of Bitcoin is not its price (although believe me, I’ll be happy to buy some back in 2011). Bitcoin’s strength is the freedom to transact in a complex world, a source of program money and a democratized form of adoption with relatively low barriers to entry. You can participate in the network by opening nodes, mining or simply buying or selling. Today, thanks to the “Ordinal Theory,” you can now write digital files in satoshi and remain free from censorship, achieve immutability and enjoy a truly decentralized file storage system. This opens up several opportunities for communication, artists and collectors, and paves the way for a better Bitcoin infrastructure. This is antifragility: adaptation, resilience and evolution in systems exposed to shocks.
Fourteen years ago, the genesis block of Bitcoin showed the message: “The Times 03/Jan/2009 Chancellor on the brink of the second bailout for banks.” Today, we face the fallout from the second largest banking collapse in US history. This taught me that, while we have not learned our lesson, we still have time for current and future generations to embrace Bitcoin technology and make the financial system sounder and more efficient.
Despite the recent financial turmoil, Bitcoin remains unscathed and has proven to be more useful than other investments in the portfolio, but a truly modern version of the financial system.
This is a guest post by Carlos Cardenas. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.