The fact of the matter is that many of us know more about Bitcoin (BTC) and the rest of our favorite digital assets, than we know about our local fiat currencies. We simply found our local currency being used and went along with the story that it was how the world operated. We embraced the United States Dollar as the most stable currency fit for being the standard across the globe. But we did not know that it was not backed by Gold or Silver.
Gold Standard ‘Abolished’ by President Nixon
In a recent tweet, Anthony Pompliano – founder and partner at Morgan Creek Digital – gave as a brief history lesson as to how the USD gold standard was suspended back in 1971. He tweeted the following:
In 1971 Richard Nixon suspended the ability to convert US dollars for gold.
He publicly said he intended to go back to the gold-standard.
We never did.
Why trust people and governments when you can trust math and code?
Further researching his claims on the Federal Reserve website, we find the following notice:
Federal Reserve notes are not redeemable in gold, silver, or any other commodity. Federal Reserve notes have not been redeemable in gold since January 30, 1934, when the Congress amended Section 16 of the Federal Reserve Act to read: “The said [Federal Reserve] notes shall be obligations of the United States….They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.” Federal Reserve notes have not been redeemable in silver since the 1960s.
The Case for Bitcoin (BTC)
As stated by Anthony Pompliano, we should trust the code and math evident in the blockchains belonging to the individual cryptocurrencies rather, than the banks and governments that purposely keep quiet as to where our local currencies come from.
Erik Voorhees, CEO of ShapeShift, summarized this fact when he tweeted the following:
Bitcoin: a digital currency with limited and known supply, no borders, and no central group controlling it. US Dollar: a digital currency with unlimited and unknown supply, border restrictions, and controlled by a banking cabal. What’s in your wallet?
In conclusion, and summing it up, we have connected the dots and realized that Bitcoin is a more secure, transparent and better store of value than our local currencies of the USD, GBP, Euro, et al. With crypto and blockchain, we can rely on math and code in a decentralized manner where everyone can demand to see the public ledger and its transaction history. On the flip side, a regular citizen cannot be granted the ledger to a government issued currency, neither can they redeem their money for gold in the case of the USD. It is therefore safe to conclude that BTC is a better option.