Two starkly different ways to fight inflation

Bitcoin and USD just succinctly illustrated their unique visions of monetary policy.

Peter A. McKay
2 min readApr 21, 2024
On the Bitcoin network, there is no equivalent of Jerome Powell. His job is automated. Photo courtesy of the Federal Reserve via Wikimedia Commons

What a study in contrasts.

A foul mood spread around Wall Street last week regarding when exactly the Federal Reserve will start printing cheap dollars again through the mechanism of lower interest rates. The U.S. central bank’s chairman, Jerome Powell, said this may take longer than previously expected due to persistently strong readings of inflation in America.

Meanwhile, the Bitcoin network just slowed its money printer, predictably and transparently, right on schedule. No shock to it whatsoever.

I refer of course to Bitcoin’s latest halving, an event that happens approximately every four years and effectively limits issuance of new tokens on the network. Bitcoin just underwent a halving Friday evening, Eastern U.S. time, in accordance with the network’s code.

For people speculating on bitcoin’s token price, halvings tend to be welcome events. The additional constraint on supply has historically tended to boost bitcoin’s market price across the three previous halvings in 2020, 2016, and 2012, according to Reuters.

But Friday’s halving was well-timed purely for educational purposes as well. For anyone who just wants to better understand what makes this “weird” new form of money different, and why it might be a necessary addition to global markets, the juxtaposition of this halving and the latest Fed drama within a few days of each other should be instructive.

A quick multiple-choice exercise that underscores the point: If you had to manage a global currency in the twenty-first century, would it make more sense to…

A. Automate the currency’s issuance according to measurable milestones, based on publicly available data that’s updated around the clock, seven days a week? Or…

B. Rely on the whims of a small committee of human beings who meet periodically in secret, try to correctly guess the exact timing when the immensely complex global economy warrants a change in monetary policy, and then emerge to announce their decisions publicly, like oracles from ancient times?

Extra credit question: Which of these options really seems “weirder” to you?

This post was adapted from my free email newsletter #w3w, which covers decentralization broadly defined. To get the full version in your inbox every Sunday, including additional headlines from around the web, subscribe here.



Peter A. McKay

Storyteller, thought leader, and marketer focused on blockchain/web3. I publish #w3w, a newsletter about decentralization. Ex-reporter for the Wall St Journal.