The European Central Bank Criticizes Bitcoin: Community Responds

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In light of the recent insolvencies of FTX and BlockFi, regulators and lawmakers from all over the world, including those in the US, are demanding for additional cryptocurrency legislation. Earlier morning, the European Central Bank (ECB) tweeted to draw attention to a blog post titled "Bitcoin's last stand." According to the paper, Bitcoin is "rarely used for legal transactions" and backing it could harm banks' reputations. It merely highlighted the issues rather than giving a comprehensive account of the history of the cryptocurrency up to this point, which would have addressed both its positive and negative features.
European Central Bank (Source: ECB) ​ 

European Central Bank (Source: ECB) ​

This article was written for the ECB blog by Jürgen Schaaf and Ulrich Bindseil, the director general and adviser to the ECB. They claimed that the "road to irrelevance" is where digital currency is headed in the future. It was also mentioned that with the heightened regulatory scrutiny from legislators around the world, it was possible for it to be "misunderstood as approval," in addition to the issue that Bitcoin is rarely utilized for legal transactions.

On Twitter, the European Central Bank asserted that any recent stabilization of the price of bitcoin was likely the product of manipulation done on purpose. Everything has two sides, including cryptocurrency. The bitcoin community is ready to preserve digital assets and take action. Michael Saylor, an American businessman replied:

#Bitcoin is driving the digital transformation of money and banking. It is already an order of magnitude more efficient than traditional finance systems based on 20th century analog technology, and growing exponentially smarter, faster, & more efficient (36%+) each year.

Other comments make reference to the meme "BTC is dead," despite the fact that the value of the cryptocurrency has been consistently rising over time when measured against other assets. The purchasing power of the Euro has been slowly dropping from 1997 to 2022. What do you think about that then?

Final Reflections

I think Bitcoin is still more efficient than the traditional financial system, despite its flaws. In comparison to wire transfers, the cost and speed of international payments have decreased thanks to Bitcoin's layer-2 lightning network. Simply focusing on the negative aspects while ignoring the positive aspects is not a sign of progress.

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