The Gold Standard
In last month’s newsletter – Bitcoin and The Poverty Line. I touched on ‘The Gold Standard’ as I discussed Bitcoin and how it can help to improve prosperity.
The Gold Standard is a controversial topic that economists and politicians have often discussed. Ron Paul, a senator in the United States, has advocated for the Gold Standard in the past, and even Alan Greenspan – previous chairman of America’s Central Bank – The Federal Reserve, has supported its benefits. However, both men have encountered strong opposition in their thoughts. As such, somebody could easily fool you into thinking that The Gold Standard is a complex topic, and it is possible to enter into many convoluted discussions when discussing the merits of it or otherwise.
I mention it here because Bitcoin is considered a form of digital gold. Its software protocol design is there to mimic the economic properties of Gold, mainly due to its limited supply, as only the creation of twenty-one million Bitcoins is allowed. In addition, it is possible to divide one Bitcoin into 100 million satoshis, and a software upgrade could divide it into even smaller units than that. Both properties are superior in comparison to gold. Add to that the easy ability to transfer Bitcoin worldwide quickly and cheaply and transport it with the utmost physical secrecy, compared to heavy gold – the advantages are not hard to see.
There is so much misconception about The Gold Standard it is hard for people to appreciate why Bitcoin’s comparison to gold is such a fantastic thing. So allow me to enlighten you. This article will demonstrate where the arguments against The Gold Standard lie. I also outline the history of the Gold Standard and why it has led us to where we are today, and why Bitcoin can help overcome the remaining difficulties.
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