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.
