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Eventually default turned these gold IOU paper notes into fiat. BofE started refusing to honor its notes in 1931. The Fed reduced the amount of gold it would redeem a dollar for in 1933, restricted gold trade by targeting the centralized bank vaults, and went full fiat in 1971.
Here's an example showing how, despite authority resemblance
https://unenumerated.blogspot.com/2016/07/artifacts-of-wealth-patterns-in_15.html …
the fundamental nature of U.S. dollars radically changed over the course of the 20th century. They look very similar, but the kind of money they represent is radically different.
ht @jp_koningpic.twitter.com/JF7KifIcXJ
At some point; “REDEEMABLE IN BITCOIN ON DEMAND AT THE UNITED STATES TREASURY OR AT ANY FEDERAL RESERVE BANK”
Lightning more reliable for that than a bank note.
So cash I debt? Why would anyone ever hold a large amount of this?
Because coins became too easy to counterfeit.https://twitter.com/NickSzabo4/status/1145207850727178241 …
I understand why paper money was created. Just don’t understand why anyone today would hold these notes as they valued under par
They'd hold it because it's a lot harder to confiscate the physical. They hold it incase an ATM all of a sudden caps the withdrawal amount or just runs out of money. It's also a lot harder to trace transactions.... to name a few use cases...
It's like the US treasury absolved itself entirely from any obligation to the redeemer. It might as well be play money.
A lot of people forget that precious metals themselves have a fiat system sitting on top of them. Once you make IOU/paper money, it all comes down to printing. If you don't hold it, you don't own it. Private keys and metals!
A very interesting fact is that even the latter bill represents a self-obligation from the issuer to accept it to cancel debts. That is, it is still a liability of the issuer despite of being irredeemable.
Nick, regarding #bitcoin, what do you think of viewing it as an useful abstract mathematical set like the numerals of the decimal numeric system or the Gregorian calendar? This concept would be beyond the technology. Technology would just follow the concept.
That is, no one could be fooled that February has 31 days because some implementation of a calendar says so. The same would apply to bitcoin for any implementation that deviates from what the market demands from bitcoin as a concept.
a thing that concerns me about gold is that the government, in times of crisis, will -always- try to take away your privately owned gold. see the US executive order 6102 (1933) during the great depression or the banking act in Australia in 1959.
They cannot confiscate gold today. 1933 was easy and could not be replicated easily today. Watch this video from 14:14 minutes onhttps://youtu.be/1mI8Lek60_w
That's a really nice article: thank you.
They just made it "lawful" and no longer required the disclosure. :p
there needs to be a new version for Libra
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