As The U.S. Sees Its Second-Biggest Banking Collapse Ever, Bitcoin Is Just Becoming Stronger
As the U.S. witnessed one of the largest banking collapses in its history, Bitcoin is being innovated upon and seeing its network grow.
This is an opinion editorial by Carlos Cardenas, an institutional account manager who has worked at legacy banks and cryptocurrency exchanges.
Author Nassim Taleb published an interview titled, “Bitcoin Is The Detector Of Imbeciles” in which he rearticulated his arguments that bitcoin cannot play the role of a currency or a store of value and suggests that it will “collapse.” But is this really true?
Sure, bitcoin has suffered catastrophic drops in its value over the past ten years, including as much as 58% last year, but overall, it had an average annual return of 1,576% between 2010 and 2021. Through Bitcoin’s evolution, we have seen a thriving global network of miners arise and over one million active addresses. Thanks to Bitcoin, we now see an emerging crypto economy inclusive of other cryptocurrencies and digital assets (utility tokens and NFTs) worth more than $1 trillion. Through all of the innovation and even the negative events associated with Bitcoin (bans, confiscations, frauds, scams, etc.), Bitcoin and its user base have adapted and prevailed.
Meanwhile, the recent collapses of financial institutions like SVB, Silvergate Bank and Signature Bank have once again highlighted the fragility of the legacy financial system. We have witnessed the systematic destruction of wealth through debasement and inflation supported by the traditional financial system, bad actors and poor policymaking for as long as we have been alive.
If you remember 2008, 1999 or 1987, or have been paying attention today, you have been aware of all these issues for a while, yet you knew there was no real alternative until Satoshi Nakamoto created Bitcoin.
The power of Bitcoin is not its price (though believe me, I would have loved to have bought some back in 2011). The power of Bitcoin is the freedom to transact in a convoluted world, its programmatic money supply and its democratized form for adoption with relatively low barriers to entry. You can participate in the network by running a node, mining or by simply buying or selling it. Today, thanks to “Ordinal Theory,” you can now inscribe digital files on a satoshi and remain free of censorship, achieve immutability and enjoy a truly-decentralized file storage system. This unlocks a number of opportunities for communications, artists and collectors, and it paves the way to better Bitcoin infrastructure. This is what antifragility is: adaptability, resiliency and evolution in a system subject to shocks.
Fourteen years ago, the Bitcoin genesis block shared a message: “The Times 03/Jan/2009 Chancellor on the brink of the second bailout for banks.” Today, we are facing fallout from the second-largest banking collapse in U.S. history. This teaches me that, while we have not learned our lessons, we still have time for present and future generations to embrace Bitcoin technology and create a sounder and more efficient financial system.
Despite recent financial turmoil, Bitcoin remains unscathed and has proven its utility in being more than another investment in a 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.