Bitcoin’s Accidental Comparison to the USD Might have Delegitimized All Claims Against it
A blunder has been made by comparing the price of an egg in USD with that of Bitcoin!
The St. Louis Federal Reserve has posted a new blog where it compares the price of eggs in USD versus Bitcoin. Although the blog is designed to crack a joke about the cryptocurrency, the Fed ultimately has ended up with an egg on its face. FRED stands for Federal Reserve Economic Data. It is essentially a database of all kinds of important economic information.
The FRED blog puts a spotlight on some kind of hot topic that is trending right now. In the past weeks, it looked at rising mortgage rates and income equality. This week’s topic, however, took a crack at Bitcoin by comparing its volatility to USD when buying eggs. The effort attempts to scramble public perception into believing dollar inflation – the worst in decades – is less volatile than the so-called inflation hedge. In this egg-on-face moment for the FRED, comparing Bitcoin to the dollar seriously legitimizes the cryptocurrency and proves even the Fed is capable of figuring it out as a unit of account. The FRED blog has as Satoshi intended, reduced each BTC to its smallest unit of measurement, which is known as the satoshi itself. The smallest unit of account of each BTC is named after the coin’s mysterious creator. Each satoshi, or sat for short, is the equivalent to 0.00000001 BTC. Every dollar is roughly 3100 sats currently. According to the FRED, a carton of a dozen grade-A eggs costs roughly US$2.50 USD. The above math adds up to about 7750 sats or 0.00007750 BTC. If the Fed can get used to pricing things in Bitcoin, so can everyone else.
Bitcoin is designed to disrupt everything the Federal Reserve stands for. And for that reason, promoting the cryptocurrency as a unit of account inadvertently is leaving an egg on the face of the Fed.
The Fed Might Come Up with Its Personal Digital Currency
However, it’s been quite some time since the Fed board has been weighing the logic of introducing a digital dollar, although officials have been careful to remain neutral and suggest that any plan should have the backing of Congress and the administration. That’s the line, too, that Michael Barr, President Joe Biden’s pick to be the next Fed vice chairman for supervision echoed at his confirmation hearing last week. However, several new Fed board members were sworn in on Monday, marking an official transition to the era of Biden appointees. While a U.S. digital currency has frequently come up in congressional hearings and debates over legislation, no bill has yet found traction that would encourage the Fed to set it in motion. The early negotiations over a CBDC often include its potential effect on stablecoins, and Fed Chair Jerome Powell has said he expects private stablecoins could coexist with the digital dollar.