Bitcoin achieves public verification of transaction records through open-source ledger technology; in contrast, the century-old Federal Reserve, while regularly releasing reports, has never undergone a comprehensive audit. This article is based on a piece by Ankish Jain, translated by Ben Run Finance, and organized and written by PANews. (Background: Stop pretending that self-custody of Bitcoin is easy; it is not.) (Supplementary background: Bernstein: The Bitcoin bull market is not over, looking at '200,000 USD'; analysts conclude: 100,000 USD is the iron bottom of this cycle) Bitcoin (Bitcoin) realizes real-time public verification of all transaction records through open-source ledger technology; however, the 112-year-old Federal Reserve, while regularly releasing reports, has never accepted a comprehensive audit. Key details, such as its emergency lending programs and foreign exchange swap operations, have long been kept from the public. Why is that? This article reveals the essential differences between the auditing mechanisms, market impact, and regulatory efficiency of the two, and analyzes the actual effects of these differences on investors, policymakers, and the global financial system. 1. Bitcoin's Self-Audit Mechanism Bitcoin is often described as a peer-to-peer digital currency, but one of its most underestimated features is its self-auditing capability. The network confirms a new block every 10 minutes through a proof-of-work mechanism, verified by thousands of independent nodes worldwide. Since January 2009, a continuous public record has been formed, spanning over 900,000 blocks and containing nearly 1.2 billion transactions. Anyone connected to the internet can verify the data in real-time without permission. In contrast, the 112-year-old Federal Reserve, while serving as a pillar of the U.S. financial system—managing interest rates, money supply, and economic stability—has never undergone a fully independent audit. It regularly publishes policy meeting minutes, balance sheets, and financial statements, but core operations such as emergency loan details, foreign exchange swap limits, and dealings with private banks remain unexamined by outsiders. This comparison is dramatic: Bitcoin, born 16 years ago, has a fully public financial trail, while the century-old Federal Reserve, which controls the world's largest economy, consistently avoids equivalent scrutiny. 2. Bitcoin's Self-Verification Logic The characteristic of continuous auditing in Bitcoin is a natural product of its open-source design. All network participants have equal rights to verify the rules, breaking the information hierarchy inherent in the banking industry—insiders have privileged access, while the public can only access what regulatory agencies disclose. The concept of full nodes is central to the system's operation; they act as independent arbiters. Nodes do not require special permission or political approval; anyone can run them with consumer-grade hardware and obtain a complete copy of the ledger. This principle of "Don't trust, verify" ensures that the supply cap of 21 million bitcoins can be enforced without relying on the trust of authoritative institutions. Each newly mined block contains a fixed amount of newly created bitcoins, reduced approximately every four years through a "halving" mechanism. From the initial reward of 50 BTC per block in 2009 to 3.125 BTC after the halving in April 2024, each currency unit in circulation can be traced back to its originating block. Blockchain analysis companies such as Chainalysis, Elliptic, and Glassnode have built complete business models around Bitcoin's public ledger. Regulatory agencies also utilize network transparency to track criminal activities; for example, in 2021, the U.S. Department of Justice successfully recovered 63.7 bitcoins in ransom paid during the Colonial Pipeline cyberattack by tracking blockchain wallet addresses. The reliability of this auditing not only stems from transparency but also relies on redundancy. Bitcoin ledger copies are distributed across Europe, Asia, and America; even if a government shuts down exchanges or data centers in one location, data can still be obtained from elsewhere, ensuring the auditing process remains ongoing and resistant to censorship. 3. The Federal Reserve's Global Role The Federal Reserve occupies a unique position in global finance. Although it only formulates U.S. monetary policy, its influence extends far beyond national borders. According to data from the International Monetary Fund, the U.S. dollar accounts for approximately 58% of global foreign exchange reserves, and nearly 90% of global trade transactions use the dollar in some form. Given this influence, the transparency of the Federal Reserve is not only a domestic issue but also concerns the international community. The institution regularly publishes weekly H.4.1 balance sheets, the Beige Book on economic conditions, and detailed minutes of Federal Open Market Committee meetings; it also releases financial statements audited by external organizations annually to disclose its assets, liabilities, and income. However, these disclosures only involve surface-level operations, while the most powerful tools of the central bank remain outside independent scrutiny. For example, during the 2008 financial crisis, the Federal Reserve created tools to lend trillions of dollars to domestic and foreign banks. The Levy Economics Institute later estimated that the cumulative support amount exceeded $29 trillion. However, the details of these interventions were only revealed years later due to lawsuits and pressure from Congress. Similar secrecy has also appeared in the foreign exchange swap lines widely used by the Federal Reserve—this tool allows foreign central banks to borrow dollars during global liquidity crises. Calls for increased transparency have been persistent. Congressman Ron Paul introduced the "Audit the Fed" bill in 2009, which passed the House but was significantly amended before becoming law. Senator Rand Paul renewed efforts in 2015, but again faced setbacks in the Senate. The Federal Reserve has consistently opposed these attempts, with officials claiming that complete transparency could politicize its decision-making and undermine its independence. Former Chairman Ben Bernanke warned in 2010 that auditing monetary policy deliberations could "severely threaten the independence of monetary policy and the stability of the financial system." This has led to what some economists call "selective transparency": the Federal Reserve discloses enough information to maintain market credibility while keeping the most sensitive details out of public view. 4. The Impact of the Transparency Gap The differences in transparency between Bitcoin and the Federal Reserve impact the market, regulation, and public accountability in three ways: First, at the level of market behavior. Data from Glassnode shows that in 2023, Bitcoin held for more than a year accounted for over 68% of circulating supply, a metric used to assess the beliefs of long-term investors. Unlike Bitcoin, whose on-chain data directly reflects holder behavior, the supply of the dollar lacks comparable statistical data—the central bank's disclosures focus on macro aggregates rather than individual behaviors. The Federal Reserve has instead created the opposite mechanism: it communicates monetary policy through announcements and press conferences, and market participants react to guidance rather than verifiable data. Traders rely on dot plots to interpret interest rate prospects quarterly, even though these are merely the views of committee members rather than firm commitments. The gap between expectations and reality can trigger trillions of dollars in global market fluctuations within minutes, highlighting the weight differences between selective communication versus direct visibility. The regulatory domain also reflects comparative value. Bitcoin's fully open ledger allows global regulatory agencies to leverage blockchain for compliance. Chainalysis reports that in 2023, U.S. authorities seized $3.4 billion in Bitcoin linked to criminal cases through on-chain tracking. In contrast, the Federal Reserve's dealings with troubled institutions during crises—such as the 2019 overnight repo market intervention—initially remained completely opaque, with only total amounts disclosed and the identities of the banks seeking assistance kept confidential. The credit gap also affects international relations. Countries that heavily rely on the dollar for trade or reserves must accept the Federal Reserve's policies without a complete understanding of the overarching strategy.

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