CTO of CoinBase, Balaji S. Srinivasan, and co-founder of Counsyl, as well as Teleport, Earn and CoinCenter released a tweet on his response to the Bank of International Settlements’ extreme warnings on cryptocurrency trading, even stating that digital commerce will bring the internet crashing to a halt.
He responded to the group’s tweet warning, saying,
“Well, if central banks hadn’t created all those dollars, Satoshi wouldn’t have created all those bitcoins.”
Also stating if traditional fiat systems were optimal, cryptocurrency startups wouldn’t have a chance and Bitcoin would become an easy way to opt out of that unfortunate system.
One tweet said,
“The difference is that all holders of a given crypto have explicitly opted in to a particular monetary policy,and can easily opt out. Prior to Bitcoin, there wasn’t an easy way to opt out of fiat currencies.”
Another tweet read,
“Choice is everything. If the monetary policy of central bankers was truly technically superior, fiat should easily beat out the crypto upstarts in a free market for currencies. We are now putting the conventional wisdom to an empirical test.”
The report was released by the Swiss-group, to supposedly push people past looking at the hype around cryptocurrencies like Bitcoin, to get them to look further into the everyday practical use of virtual currencies in real world situations.
Not to any surprise, the group wasn’t impressed with their reported findings. They even stated that they found several problems with using cryptocurrency as a total replacement of traditional fiat currency on a centralized network. One of the issues was in fear that cryptocurrency would bring the internet to a halt. That since all transactions made in Bitcoin are recorded on massive supercomputers that process the data, the need for resources would bring the digital world of the web to a crashing stop.
Other than breaking the internet down, the group’s report also spoke of some other issues. Bitcoin is extremely volatile, cryptocurrency in general is and living in a bubble that isn’t realistic or safe.
The report, presented by BIS head of research Hyun Song Shin was heard saying,
“Just imagine, if you bought a $2 coffee with bitcoin, you would have had to pay $57 to make that transaction go through,”
What Srinivasan stated was they were responding to a much bigger issue is that BIS’s message carried a heavy undertow, the cryptocurrency in general is dangerous, not only to fiat that is already in place by governments, but also to the overall health of the world itself because cryptocurrency promotes a type of disorder.
This is pretty much what cryptocurrency was built to do. Ever since Qin Shi Huang, the very First Emporer of China released his copper coin as the only usable currency in the empire during the mid-200’s BC – governments around the globe have attempted to create and keep a centralized monetary system.
Choice is everything. If the monetary policy of central bankers was truly technically superior, fiat should easily beat out the crypto upstarts in a free market for currencies. We are now putting the conventional wisdom to an empirical test.
— Balaji S. Srinivasan (@balajis) July 6, 2018
It was the said failure or sabotage of the central banking system that made the ideal incubator for Satoshi to create Bitcoin in 2008. The world was in a financial crisis, struggling on its knees with people losing houses, pensions, jobs, and investments entirely. It was while watching these unfortunate events, more importantly seeing the ones who created them staying safe and sound that Bitcoin was created according to Mr. Srinivasan. He tweeted this recently, stating to opt out of the fiat system happened because Bitcoin allowed them to do it with ease.
The BIS report warned that,
“Trust can evaporate at any time because of the fragility of the decentralized consensus through which transactions are recorded,”
but it wasn’t the breach of the public trust by the central banking systems and the governments of the world that control them, which makes cryptocurrencies like Bitcoin and Ethereum such an attractive investment to so many people around the world.