Musk tries to explain Bitcoin to JK Rowling, attacks central banks - Business Insider

A composite photo showing Elon Musk (left) at a conference in March 2020 and J.K. Rowling (right) at a film premiere in December 2019. AP/Business Insider

Elon Musk intervened in a Twitter thread to attempt to explain bitcoin to J.K. Rowling, and ended up attacking central banks whom he said made the cryptocurrency "look solid by comparison."

Musk chimed in after Rowling, the author of the Harry Potter novels, was bombarded by replies after tweeting: "I don't understand bitcoin. Please explain it to me."

Bitcoin advocates and skeptics then rushed to explain the cryptocurrency — a financial asset which exists solely in digital form.

Unlike traditional currencies, it is not tied to a central bank controlled by a government, and instead is regulated by complicated mathematics and a public log — called a blockchain — of all transactions.

Its value has ballooned since its creation. According to Markets Insider data, a single Bitcoin was worth almost $20,000 in December 2017. Its price at the time of writing was around $9,410.

Despite lofty predictions by its advocates, it has not found widespread use.

Rowling eventually gave up trying to understand bitcoin, posting a tweet that implied that she was no longer interested.

Musk responded essentially agreeing with her, but taking a swipe at the behavior of traditional central bankers in the process.

Musk said that central banks — like the Federal Reserve, European Central Bank, Bank of Japan, and Bank of England — made bitcoin "look solid by comparison" because of their recent behavior.

Since the financial crisis in 2008, banks embarked on a huge program of "quantitative easing" — essentially pumping vast sums into the economy — to prevent the collapse of the economy.

It also left interest rates at historic lows and, critics say, has distorted financial markets in ways we are yet to understand fully.

Many banks have renewed their easing programs in light of the coronavirus pandemic. A report in late April by Fitch Ratings said that central banks around the world had already committed to $6 trillion worth of easing programs.

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