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@ Marc
2025-02-05 22:12:20
In the Case For A 100 Percent Gold Dollar, Murray Rothbard argues, “the debacle of 1931-1933, when the world abandoned the gold standard, was not a sudden shift from gold weight to paper name; it was the last step in a lenghty, complex process.” He said that before WWI, a dollar was defined as aproximately 1/20th of an ounce of gold.” If it worked, a dollar would buy about as much as $143 does today, but it didn't work.
Gold ownership was banned until Executive Order 6102 was lifted in the 1970's. According to Rothbard, France sent a battleship to the United States to repatriate its gold. Then, Nixon took the dollar "temporarily" off the gold standard in 1971. It just so happened I listened to a podcast after I started writing this. Joseph Voelnel tells the story in this podcast.
https://fountain.fm/episode/mXreHZ2um0RnxaHsWMfe
I paid for the transcript using bitcoin on the lightning network using a podcasting 2.0 app named Fountain. Try it out. You can earn small amount of bitcoin just for listening. It is not self-custodial, but it's a great way to get started if you're curious. If you're not curious, you probably won't like bitcoin.
The US government debased gold and made it 41% after issuing Executive Order 6102. Nixon took the dollar completely off the gold standard in 1971. The dollar is still a fiat currency, backed by nothing but "good faith and credit of the United States." That's basically nothing. You might as well say the US dollar is backed by good vibes. Do you think the US can pay 36 trillion bucks back with good vibes?
I do not.
**Gold will not fix this**.
If the US went back to the gold standard, we would need to trust the good vibes of Fort Knox, but anyone in their right mind would not trust these good vibes.
*"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."*
**Satoshi Nakamoto, P2P Foundation thread.**
Even if we self-custody gold again, metal does not prevent debasement. Here's one of my favorite quotes from Adam Smith's Wealth of Nations:
*"There was a third event which occurred in the course of the same period, and which, though it could not occasion any scarcity of corn, nor, perhaps, in the real quantity of silver which was usually paid for it, must necessarily have occasioned some augmentation in the nominal sum. This event was the great debasement of the silver coin, by clipping and wearing. This evil had begun in the reign of Charles II. and had gone on continually increasing till 1695; at which time, as we may learn from Mr Lowndes, the current silver coin was, at an average, near five-and-twenty percent. Below its standard value."*
Monetary debasement is not a new phenomenon. The double-spending problem has been around for hundreds of years. In my opinion, bitcoin is the best shot humankind has of solving the double spending problem.
*"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending."*
**Satoshi Nakamoto, Bitcoin: A Peer-To-Peer Electronic Cash System**
To steel-man the case against bitcoin, I would say the biggest issue is how many people prefer to use a trusted third party to custody their bitcoin. That’s why education is important. In principle, I think we should keep 100% custody of our bitcoin. In practice, I do keep some of my sats in a custodial wallet to pay bills. I working on this, but I need to open up a fatter lightning channel and set up auto-payments to my Strike wallet. That’s my goal, but I need to I want to make sure I don’t rug myself first so I am testing it out with smaller amounts first. It is possible, it just takes time to learn how to do it safely.
I still think bitcoin is our best shot against centuries of monetary debasement.
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