Recently, J.K. Rowling, the author of the Harry Potter book, took to twitter and asked that someone explain Bitcoin to her. Her tweet received thousands of replies and one of the people that replied to the tweet was Elon Musk.
Elon Musk’s Response to J. K. Rowling
Shortly after her question, Elon Musk took it upon himself to explain Bitcoin, in what turned out to be a bizarre exchange. Others who replied to Rowling said that unlike fiat currencies, Bitcoin was not tied to a central bank or controlled by any government. Instead, the cryptocurrency is regulated by a complex set of equations and a public ledger known as the blockchain. Besides that, they told her that Bitcoin was a financial asset that exists in digital form.
Since its creation, the value of Bitcoin has grown from about $1 to over $20,000 towards the end of 2017. Currently, the price of BTC is around $9,700. However, Bitcoin has failed to achieve one of its main goals; that of mass adoptions. Today, only a very small percentage own Bitcoin or are aware of the existence of Bitcoin. Some people in 2017 actually speculated that Elon was the creator of Bitcoin due to his understanding of economics and cryptography. This theory was later debunked by Elon as he publicly stated that he was not involved in the creation of the cryptocurrency.
Eventually, Rowling gave up on trying to understand how Bitcoin works. Her tweet implied that she had lost interest in the cryptocurrency due to how complex it appeared to her. She concluded that it all sounded quite creepy to her. In his reply, Elon Musk seemed to agree with her.
He also took the opportunity to criticize central banks for the massive printing of money in which they were engaged. According to him, the actions of these central banks had made Bitcoin seem more solid. Elon Musk also revealed that he still owns 0.25 BTC.
Massive Stimulus Packages Globally
Around the world, central banks have been engaged in the massive printing of money. The central banks of Japan, the US, Europe, and the UK have all printed trillions of dollars thus far. They have been printing money since the 2008 financial crisis in what has come to be known as “quantitative easing.” The aim of printing large sums of cash is to prevent the collapse of their economies.
It was out of the 2008 crisis that Bitcoin was born. Someone or a group of people decided to create Bitcoin as a way to give people the power to their finances. Elon Musk is not the only famous person to criticize quantitative easing. Recently, Robert Kiyosaki, the author of Rich Dad Poor Dad, also took to Twitter to explain why it was time to invest in Bitcoin.
The Future Does Not Look Great
The huge bailout by the Federal Reserve has driven interest rates to unprecedented lows. Besides that, it has distorted the financial markets in a manner that even top economic experts are yet to understand. Despite a lot of criticism, most major central banks have renewed their quantitative easing efforts. Thus far, $6 trillion has been printed out of thin air according to a recent report.
The decision by central banks to print huge amounts of cash is no doubt making BTC look more attractive to those worried about financial collapse. Unlike fiat currencies, BTC has mechanisms hardcoded into it that prevent inflation. One of them is the halving event, which recently took place.
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