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6 - Comparing and Contrasting Gold and Bitcoin Standards

Published online by Cambridge University Press:  16 March 2023

Lawrence H. White
Lawrence H. White
Affiliation:
George Mason University, Virginia
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Summary

Chapter 6. As a future monetary standard, should fiat standards collapse, gold would exhibit greater purchasing-power stability than Bitcoin. Gold and Bitcoin supply and demand diagrams from earlier chapters, brought side-by-side, illustrate that Bitcoin’s purchasing power is more volatile in the short run and especially in the long run. Legal obstacles facing gold and Bitcoin as media of exchange are similar. Bitcoin’s main advantage is its greater resistant to government censorship, but the difference is smaller than sometimes claimed. A determined government can drive Bitcoin underground to the point where it is unlikely to serve as a common currency. The policy conclusion is not a blueprint for top-down choice among monetary standards, but a plea to let potential monies compete openly and freely on a legally level playing field.

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Better Money
Gold, Fiat, or Bitcoin?
 , pp. 191 - 212
Publisher: Cambridge University Press
Print publication year: 2023

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