Nick Szabo  🔑

Flight to foreign assets *isn't* a threat to our policy. Neither is flight to gold or BTC.

No asset that can fluctuate in its nominal price is a threat to our policy.

Only problem is when prices are set in something that inherently has a 0 rate of ROR in terms of itself. Currently, paper currency is somewhat like that, but that can be fixed. If prices were set in something else that inherently had a 0 return in terms of itself that's a problem

So you'd have to prevent people from using crypto and gold as media of exchange?

It is totally fine for people to use crypto and gold as media of exchange. I have myself proposed the reintroduction of gold coins minted by the government. What is a problem is if people use gold or crypto as a unit of account. The dollar needs to remain the unit of account.

Hi Miles, great thread! Could you please elaborate why it is a problem if people use gold or bitcoin as unit if account? Why should USD stay unit of account? USD always has the problem of the Triffin Dilemma.

It is simply this: In order for monetary stabilization to be possible, the central bank needs to be in charge of the unit of account—or at least a unit in which *many* prices are set. The Bitcoin software is not sophisticated enough to do stabilizing monetary policy.