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0 sats \ 4 replies \ @frostdragon 11 Aug 2022 \ on: What do you fear most around Bitcoin? bitcoin
The government taking a hard stance against it. I don’t think it’ll hurt bitcoin, but it’ll make things difficult and stressful for a while.
I think an even worse case scenario for bitcoin is countries going back to the gold standard, but that seems astronomically unlikely.
How is going back to a gold standard even worse for bitcoin? Gold is heavy and cumbersome, extremely expensive and difficult to transport. Not to mention difficult to verify authenticity. Also, not infinitely divisible. Bitcoin beats gold on so many different fronts, it's not even close...
If countries go back to a gold standard, it would make bitcoin look even better.
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Good question!
Going back to the gold standard wouldn't mean people carry around or transport gold, it just means paper dollars would be redeemable for a set amount of gold again. No more monetary supply increase (aside from gold mining).
Bitcoin still beats gold in the long run for tons of reasons, but I think it'd give the government the best fighting chance, because from their perspective, it would be the best of both worlds: stabilized economy via hard/sound money, and full regulatory power. Going to gold + telling the public that unregulated money is dangerous and then regulating the hell out of crypto would give the USD the best fighting chance against bitcoin.
But... Making the switch would cause such an insane economic crash that it would be political suicide to advocate for it.
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Even if we went back to a gold standard, I don't see how there wouldn't be monetary paper supply increase. There was plenty of monetary supply increase during the gold standard before it was left behind. Going back to a gold standard wouldn't really change much from the current system, and if anything would get people to think about money systems and highlight the positives of bitcoin in relation to gold even further.
As far as I'm concerned, all other currencies are already doomed against bitcoin. It's like opening Pandora's Box.
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I hear what you're saying, but that's not the scenario I'm talking about. When I say going back to the gold standard, I mean actually going back to the gold standard in the sense that 1 dollar = X unchanging ounces of gold and the money printer shuts all the way off. Which is why I think it's super unlikely.
Ultimately you're right - we've already run that experiment, we printed more money than could be redeemed for gold, and when that got out of hand we just cut the ties to gold. If for some crazy reason we went back to gold, there's no reason to think this wouldn't happen again.
I'm just making the hypothetical point that if the US gov actually learned from its mistake, and actually stuck to gold in a real way and didn't print more money, bitcoin would have a legitimate competitor, at least for a while.
EDIT: Some Austrians like Schiff think this is actually going to happen (which is crazy imo) and that cryptocurrencies like bitcoin are going to crash as soon as we go back to sound money that "has a track record". Like I said, that's not a real fear of mine. Just an interesting one to ponder.
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