Bitcoiners donâ€™t cry.
If anything, the most committed and focused Bitcoin advocates are usually stereotyped as merciless trolls and self-satisfied jerks, whether theyâ€™re making fun of BTC skeptic Peter Schiff or other cryptocurrencies. So it is truly exceptional that the biggest Bitcoin announcement in a year full of them â€“ the adoption of Bitcoin as legal tender in El Salvador â€“ was made through a veil of overwhelmed tears.
Jack Mallers, the elfin CEO of bitcoin payments app Strike, was the man with the waterworks. Mallers had helped shepherd the initiative to the finish line over months of meetings with Salvadoran President Nayib Bukele. By the time he was on stage at Bitcoin Miami in June, the weight of it all caught up with him.
This post is part of CoinDeskâ€™s Most Influential 2021 series. The video NFT by Norman & Robness is available at SuperRare.
â€œThat moment to me was way bigger than myself,â€ he says, â€œOr [even] the country of El Salvador. In my opinion, this is one of the bigger developments in economics and emerging markets in the last 250 years. Itâ€™s the most important thing Iâ€™ve ever been a part of, and likely ever will be.â€ (Some quotes from our conversation have been edited for clarity and length.)
â€œ[And] to see my dad in the front row was really special. He told me I was making him proud, making the family proud.â€ Mallers is the third generation of his family to work in finance â€“ his grandfather was chairman of the Chicago Board of Trade.
Bid on the video NFT of Jack Mallers and Nayib Bukele by Norman & Robness at SuperRare.
That pedigree makes Mallersâ€™ professed humility a bit more surprising. To hear him tell it, he helped midwife a financial revolution more or less by chance. â€œA few years ago, no one cared what I really had to say. Iâ€™m a pleb. Forever a pleb, always will be a pleb. I donâ€™t think of myself as an influencer whatsoever.â€
The humility is fair in at least one crucial sense: Despite long weeks spent talking to Bukele and his inner circle, and even though Strike is marketing its payments app there, El Salvadorâ€™s big move isnâ€™t a Strike project.
â€œI was advising the government,â€ says Mallers, â€œAnd that was it. Strike has a headquarters in San Salvador, and all of our [user] metrics and cohorts are growing at a shocking rate â€¦ and weâ€™re very excited to roll out across Latin America and other emerging markets.
â€œBut neither I nor my company is representative of whatâ€™s going on there, and thatâ€™s tremendously important. The whole concept is that you donâ€™t need any central [provider]. If Columbia were to launch, you donâ€™t need a government wallet, you donâ€™t need a Strike.â€
Read more: The Lightning Network Is Going to Change How You Think About Bitcoin – Jeff Wilser
Thatâ€™s just scratching the surface of why El Salvadorâ€™s adoption of Bitcoin as financial infrastructure is so transformational. There is, of course, the headline advantage of quick and cheap cross-border payments â€“ remittances from emigrants make up a large portion of El Salvadorâ€™s gross domestic product, and a bitcoin-based system could drastically reduce fees relative to the likes of Western Union. And moving money entirely on their phones may keep Salvadorans safer than older methods.
But the stakes are even larger than that. When he really gets going on the significance of El Salvadorâ€™s transformation, Mallers face tightens and his gaze goes flat. No longer the bubbly, humble goofball, heâ€™s now the ferocious bitcoiner of Christine Lagardeâ€™s worst nightmares.
â€œMonetary expansion from central banks puts emerging markets, including El Salvador, at tremendous risk. Now you have an emerging market that can opt out of their relationship and reliance on a central bank or an institution like the IMF (International Monetary Fund) and â€¦ find opportunity in a separate monetary system that lives and is defended within a distributed network.â€
The moment is at least as big for Bitcoin as it is for El Salvador â€“ one of a series of high-profile validations of the system that defined 2021. Despite some hiccups with the rollout of El Salvadorâ€™s Chivo wallet, Mallers sees El Salvadorâ€™s policy as a massive vindication for Satoshi Nakamotoâ€™s vision. (Nakamoto is the anonymous founder or founders of Bitcoin.)
â€œFirst and foremost, bitcoin works,â€ Mallers says. â€œIâ€™ve been around long enough where that wasnâ€™t necessarily always [clear]. And going forward, what it means is â€“ how do you price that? How do you price the fact that there is a monetary policy, a monetary asset, a monetary energy â€¦ that you can rely on, thatâ€™s defended by a distributed system?
â€œIt looks like this [Bitcoin] thing is going to work. It doesnâ€™t look like itâ€™s going to zero. It looks like itâ€™s financial acid, and anything it touches, itâ€™s really going to swallow up and just destroy.â€
Thatâ€™s an understandably worrying vision for some in the legacy financial system. The IMF and World Bank in particular have balked at El Salvadorâ€™s plan. A forthcoming Salvadoran bond backed by bitcoin and bitcoin mining could help the country make an end run around IMF financing, which is often doled out to developing countries with serious strings attached.
Mallers professes confusion at the development banksâ€™ hostility.
Read more: Strikeâ€™s Jack Mallers on Fixing the Fiat Problem – Jeff Wilser
â€œI actually just presented at the IMF, and this is what I told them: The G-20 (group of 20 major economies) and the U.N. (United Nations) have a mandate to lower the cost of remittance and cross-border payments to 5%. And itâ€™s because low-wage workers, immigrants, and refugees are reliant on sending money back home to smaller markets â€¦
â€œI think that if the U.N. and the G-20 really want to lower remitting costs, want to improve financial inclusion, want to build stability in financial markets, my pitch to them is, you should take a look at bitcoin, and stop trying to mandate [lower prices] for Western Union.
â€œItâ€™s an opt-in system, and El Salvador is using it to improve the quality of their [citizensâ€™] lives. So what? If it was a hammer or a nail, or itâ€™s bitcoin, itâ€™s just a tool. If you have a problem with people improving their lives and their citizensâ€™ lives, then I have a problem with you. Then Iâ€™d really question your motives.â€
But thatâ€™s about as negative as Mallers is willing to get. â€œWe should be celebrating, because humans have invented the best financial tool in our history, and itâ€™s an exciting time to be alive and use it,â€ he says.
Of course, Mallersâ€™ role in that evolution does give his company a leg up on the future, and Strike is prepared to seize it. â€œWeâ€™re going to launch in a lot of emerging markets. And I think there are also a lot of developed market [opportunities] â€¦ Weâ€™re trying to build the best consumer experience in the world. Step by step, more countries, more features, more products. Weâ€™re just getting started.
â€œI just feel lucky to be alive and capable of building things right now,â€ Mallers says, his eyes sparkling. â€œItâ€™s a unique time for our species.â€