On the 15th January 2025, the Libertarian Alliance published this article by me: A Case for Returning to the Gold Standard. On the 19th January 2025, Hugo Miller posted this reply:
I would have thought a person of your generation would be advocating for a Bitcoin standard rather than a Gold Standard?
Gold has served us well for millennia as a store of value, but it has many disadvantages compared with Bitcoin: The supply of gold increases by approximately 1.6 % per annum. And the supply can be increased to meet an increase in demand. There is even talk of gold being found on asteroids – if they found an asteroid made of gold, the price of gold would be similar to that of iron.
The supply of Bitcoin, by contrast, is limited to 21 million, with the last bitcoin due to be mined in May 2140. Bitcoin is the only commodity in history where the supply is fixed regardless of demand. These rules are fixed by the immutable laws of mathematics, and they cannot be altered by venal politicians or bankers.
Unlike Bitcoin, you cannot send gold down the internet to buy merchandise on-line.
Gold, unlike Bitcoin, is difficult to assay and verify.
Gold is all-but impossible to move abroad in large quantities. By contrast, Bitcoin can be moved across borders with ease. and without the ‘authorities’ knowing about it. All you need is a twelve-word ‘seed phrase’ that you can carry in your head, and you can retrieve your Bitcoin anywhere in the world for the cost of a new wallet (about $70).
President Trump is talking about creating a Bitcoin strategic reserve. He is proposing to buy 547 Bitcoin per day. At present, only 450 Bitcoin are being mined each day, and this number will be halved in three years’ time. One doesn’t need a degree in economics to understand how this will affect the price of Bitcoin.
I have come to regard Bitcoin as mankind’s greatest invention since the wheel. It is a massive force for good in the world, and will transform people’s lives the world over.
Here is my reply:
Dear Hugo,
Thank you for your comments on my case for returning to the gold standard. Your points on Bitcoin are compelling, and I agree that it represents a fascinating and innovative step forward in monetary technology. However, while Bitcoin has its advantages, I remain convinced that gold is the superior basis for a monetary standard. Allow me to explain.
The Advantages of Bitcoin
First, I agree with your assessment of Bitcoin’s unique qualities. Its fixed supply of 21 million coins ensures a level of scarcity that gold cannot match, particularly given the possibility of new gold discoveries or even asteroid mining. The immutability of Bitcoin’s rules, governed by mathematics rather than the whims of politicians or bankers, is a useful innovation.
You are also right to highlight Bitcoin’s ease of transfer. In a world where borders and bureaucratic controls often hinder the free movement of money, Bitcoin’s digital nature is a clear advantage. Its portability, reducible to a mere seed phrase, makes it a uniquely powerful tool for individuals seeking financial autonomy.
Why Gold Retains Key Advantages
However, gold remains superior in several respects. First, its role as a store of value is unmatched. Gold has been trusted as money for thousands of years, transcending cultures and technological revolutions. Bitcoin, by contrast, is less than two decades old and remains vulnerable to the risks of novelty, including regulatory crackdowns, technological obsolescence, and the possibility of a catastrophic flaw in its underlying code.
Gold also has an inherent value that Bitcoin lacks. While Bitcoin’s value is purely digital and derives from trust in its cryptographic framework, gold has tangible properties that make it universally desirable: it is durable, malleable, and useful in industries ranging from electronics to jewellery. Even if digital currencies were to fall out of favour, gold would retain its value.
Volatility and Trust
Bitcoin’s volatility is another drawback. Its price can swing wildly, driven by speculation and market sentiment. This instability undermines its utility as a standard for monetary policy. A currency must provide a reliable measure of value over time. Gold’s price, while not immune to fluctuation, is more stable over the long term, offering a dependable anchor for economic activity.
Moreover, while Bitcoin offers pseudonymity and decentralisation, it does not escape reliance on technology. The entire Bitcoin system depends on a functioning internet and a reliable energy supply. Gold, by contrast, is independent of infrastructure. It exists as a tangible asset that requires no electricity, no passwords, and no devices to store or transfer. In times of crisis, gold can operate as a medium of exchange when digital systems fail.
Portability vs Physical Security
You rightly point out that Bitcoin can be transferred across borders with ease, while gold is cumbersome to move. However, this advantage cuts both ways. Bitcoin’s digital nature makes it vulnerable to hacking, theft, and even confiscation by governments that seize control of exchanges or criminalise ownership. Gold, though more difficult to transport, offers a form of security that cannot be erased by a keystroke.
A Balanced Perspective
Bitcoin is undoubtedly an extraordinary innovation, and I do not dismiss its role in the future of money. It may complement gold, serving as a decentralised reserve asset alongside a gold-backed currency. However, I believe that gold, with its proven record and tangible value, offers a more stable and universally trusted foundation for a monetary system.
Thank you for engaging in this dialogue, Hugo. Your insights enrich the discussion, and I hope we can continue to explore the evolving relationship between gold, Bitcoin, and sound money.
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Thank you Bryan – those are good arguments, but they have several flaws; –
1) “[gold’s] role as a store of value is unmatched.”
It is not only matched, but vastly exceeded, by Bitcoin’s role as a ‘store of value’. May 22nd 2010 was ‘Bitcoin Pizza Day’ – a Floridian named Laszlo Hanyecz bought two pizzas for ten thousand Bitcoin – about $50 back then. This was the first time ever that somebody had used Bitcoin as ‘money’. It was also the most expensive meal in human history. If Mr Hanyecz had kept the Bitcoin instead f eating them, he would today be worth more than $1 billion. Gold, meanwhile, has increased by just over 2.5 times since 2010. Without doing the maths, gold has probably kept pace with inflation but no more.
2) “….regulatory crackdowns, technological obsolescence, and the possibility of a catastrophic flaw in its underlying code.”
The Bitcoin block-chain is not subject to regulatory over-sight. The exchanges are, which is why you should never leave your Bitcoin on an exchange!
Bitcoin’s underlying code is constantly being up-dated by an army of dedicated Bitcoiners who are always on the look-out for flaws or for potential improvements to the code.
3) “… gold has tangible properties that make it universally desirable”
This is the ‘intrinsic value’ argument. In fact gold has very few uses outside a store of value – only ten per-cent of gold or thereabouts is used in industry. And most of those uses are VERY recent. For thousands of years, gold has been used in jewellery, but it has only been used in electronics etc for a century or so.
Approximately 90% of silver, by contrast, is used in industry.
4) “Bitcoin’s volatility is another drawback. Its price can swing wildly, driven by speculation and market sentiment. This instability undermines its utility as a standard for monetary policy…”
Bitcoin has a relativelty small market capitalisation, as it is so new. As adoption grows, so will the market cap, and this will stabilise the price in fiat terms. Volatility is not necessarily a bad thing however – one bitcoin will always equal one bitcoin!
5) “The entire Bitcoin system depends on a functioning internet and a reliable energy supply. ”
You are half right! Bitcoin does not need the internet, now that Blockstream has launched its satellite service. This connects anyone with a Blockstream receiver to the Bitcoin block-chain via (obviously!) satellite.
Now we get to what is possibly the most important point in this whole discussion – money, whether we like it or not, is going digital. Those of use who have not adopted Bitcoin will soon find ourselves locked in the digital jail that is the CBDC. That will run on a CENTRALISED block-chain which will also need electricity and the internet to access it. That will be a nightmare beyond our wildest imagination. If the internet goes down, EVERYTHING in the modern world will grind to a halt – except Bitcoin. With a little petrol generator, a Bitcoiner can keep going.
Also, whatever happens to the electricity supply or to the internet, your Bitcoin will still be sitting there on the block-chain when it all comes back on. Can the same thing be said for your government-approved CBDC? I somehow doubt it.
6) “[Gold] exists as a tangible asset that requires no electricity, no passwords, and no devices to store or transfer.”
Maybe not. But it does require a vault, or somewhere safe to keep it. If you dig a hole in your back garden to hide your gold in, you had better keep it a secret, in order to avoid un-welcome visitors. And if you hand your gold to someone to store it for you, you have to a) pay them and b) trust them. Not as simple as storing Bitcoin on a hardware wallet!
Bitcoin, as I said in my last point, requires no electricity to STORE it, although it does to SPEND it.
7) “Bitcoin’s digital nature makes it vulnerable to hacking, theft, and even confiscation by governments that seize control of exchanges or criminalise ownership. Gold, though more difficult to transport, offers a form of security that cannot be erased by a keystroke.”
I take it you are unaware of FDR’s Executive Order 6102 of 1933? FDR made it illegal for Americans to ‘hoard’ gold under pain of a $10,000 fine or ten years’ imprisonment. He confiscated everybody’s gold and paid $22.67 per oz. in compensation. When he had rounded up all the gold, he re-valued it to $35 per oz.! It remained illegal for Americans to own gold until 1974 in the Land of the Free! This whole thing was of course quite un-Constitutional but was allowed by the courts nonetheless. I have a feeling that this gold is still on the government’s books at $35 per oz., but don’t quote me.
How much gold (if any) do you think is in Ft Knox or in the vaults of the Bank of England? When was it last audited? Truth be told, we have no idea! So gold is not as secure as you may believe!
In addition, there is more ‘paper gold’ out there than there is gold to back it, by a factor of a lot! A great many people who THINK they own gold are going to be disappointed!
Going back to Bitcoin, governments can indeed seize or control Bitcoin exchanges. But as I said, you never leave your Bitcoin on an exchange anyway, so let them! Any Bitcoin that gets lost in this manner makes me richer, as it pushes up the value of the remaining Bitcoin. Bitcoin is as un-hackable as anything in the known Universe. If there are 25 million Bitcoin wallets, and if you tried to hack one of the addresses with a computer that can generate one billion keys per hour, it would take you forty-eight times the age of the Universe to have a 50% chance of success. That’s good enough for me! If a government tried to make Bitcoin illegal, we would just ignore them. There are 50 million Bitcoiners in the US. They can’t jail all of us. In any case, we can just leave and take our Bitcoin with us. Imagine if the Jews in Nazi Germany had had Bitcoin!
PS Although the tenor of this article may suggest I am in the US, I am actually Sussex-based, although I do have a home in Florida, where I hope to be next week!
Hugo Miller
Hi Hugo!
I’ll admit, you’ve got some excellent points. Bitcoin is revolutionary in many ways, and I can see why people like you are so excited about it. But I think gold still holds its ground for reasons that might not be as flashy but are equally important. Let me take a crack at explaining why.
1. Gold’s Steady Role as a Store of Value
You’re absolutely right—Bitcoin has massively outperformed gold in terms of price growth over the past decade. But I think this actually highlights one of Bitcoin’s weaknesses. Those pizzas you mentioned, which are now worth billions, show how unstable Bitcoin’s value has been. Imagine trying to run an economy when your “money” is worth one thing one day and something entirely different the next. Gold, on the other hand, has been a rock-solid store of value for thousands of years. It doesn’t make headlines, but it does what money is supposed to do—stay dependable.
2. Bitcoin and Technology Risks
You mentioned that Bitcoin’s blockch
ain is constantly updated by a dedicated community, and I get that this keeps it secure and functional. But humans are humans, and no system is entirely immune to mistakes or conflicts. Look at Bitcoin forks like Bitcoin Cash—what happens if people disagree about what Bitcoin should be? Gold doesn’t have this problem. It’s not dependent on networks, updates, or consensus. It’s just gold, and it always will be.
3. The “Intrinsic Value” Debate
I see what you’re saying about gold’s industrial uses being fairly limited. But gold’s value isn’t just about its usefulness—its beauty, rarity, and long history as a symbol of wealth play a huge role. Gold doesn’t need explaining; people just trust it. Bitcoin, on the other hand, is entirely abstract. That’s fine for tech-savvy people, but I think it makes Bitcoin harder to trust for the average person. Gold’s value feels tangible in a way that Bitcoin’s doesn’t.
4. Volatility and Adoption
Your point about Bitcoin’s market cap is spot on—its price swings because it’s still new. But even as adoption grows, Bitcoin’s fixed supply could lead to deflation, which might cause its own problems. Unlike inflation, some deflation is good. When it becomes extreme, deflation has its own problems. Gold doesn’t have this issue. Its supply grows slowly, so it balances scarcity with flexibility. That’s why it worked so well as the backbone of economies for centuries.
5. Dependence on Infrastructure
The Blockstream satellite service is a clever workaround, and I’ll give you that Bitcoin has some creative solutions to infrastructure problems. But even with satellites, you still need devices to use Bitcoin, and you still need power. Gold, meanwhile, is completely self-sufficient. If everything collapses tomorrow, you can still use gold to trade. It’s like the ultimate backup plan.
6. Security and Portability
Yes, I’m aware of FDR’s gold confiscation, and it’s a good point. But the fact that governments wanted to hoard gold for themselves only proves how valuable it is! Bitcoin’s portability is a huge advantage, but it’s not perfect. If governments decide to crack down on Bitcoin, they might not be able to confiscate it directly, but they can make it difficult to use. Gold is harder to transport, but its physical presence gives it a certain security that Bitcoin can’t match.
7. The Future of Money
I completely agree with your concerns about Central Bank Digital Currencies (CBDCs). They’re scary, and Bitcoin is an excellent tool for resisting that kind of centralisation. But I don’t think Bitcoin can stand alone. Gold has been the ultimate hedge against government overreach for centuries, and I think it will remain relevant even as Bitcoin grows. Together, gold and Bitcoin could form a powerful alliance—gold as the steady foundation, and Bitcoin as the agile, tech-savvy option.
Hugo, I really appreciate your points, and I think we actually agree on a lot more than we disagree. Bitcoin is an amazing innovation, and I can see it playing a huge role in the future of money. But for me, gold still offers something Bitcoin can’t—timelessness, trust, and a simplicity that doesn’t rely on technology.
Thanks again for the discussion, and safe travels to Florida.