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  Umpire_State_Bldg Reply

  Gold has two serious problems:
  * Expensive to store securely
  * Slow, and *very* expensive to transport securely

  This caused people to migrate from using physical gold to using “gold backed” banknotes.

  Banknotes have their own problems:
  * Users need to trust bankers
  * Bankers are highly incentivized to cheat their customers
  * Fractional reserve lending
  * Bank runs
  * Boom/bust cycles

  In 1971, as a result of the mother of all bank runs, the system changed to fiat currency — created from thin air and backed by nothing. The central bankers *promised* they would not “print” too much too fast. Then, the bankers began “printing” their fiat currencies to death.

  There are now two kinds of fiat currency:
  * Those which have gone to zero
  * Those which are still on their way to zero

  Fiat currency replaced the boom/bust cycle with the super-boom/super-bust cycle.

  Both “gold backed” banknotes and fiat currency share a common, fatal flaw:
  * “Money printing” is a form of theft

  Now there is Bitcoin, the new superior form of money.

  Bitcoin has all the good properties of physical gold: Durable, divisible, portable, fungible, recognizable, and **scarce**. *Unlike* gold, Bitcoin coin is *inexpensive* to store securely and Bitcoin is fast and *inexpensive* to transport securely.

  People will naturally migrate to use Bitcoin, leaving fiat currency, “gold backed” notes, and physical gold in the dust.

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  February 22, 2023 at 8:47 am