Nick Szabo  🔑

Because these were sudden deflationary collapses of the banking system, and not regular deflationary economic growth. They were a result of credit expansion in the first place which hard money makes impossible. And because of minimum wages & gov't central planning of the economy.

The pre-1914 gold standard, in contrast, kept M expanding enough to avoid falling equilibrium money wage rates. A pure Bitcoin standard, without bitcoin fractional-reserve banks, would almost certainly pose problems in a world of nominal rigidities--that is, the real world.

If I accept that FRB is necessary and a free market product, why can't FRB be developed over a bitcoin standard like it was over the gold standard? To be clear, I don't think FRB is necessary or possible in a free market, but either way it's a meaningless objection to bitcoin.

I believe Bitcoin FRB could ad would develop, if allowed. But as many Bitcoin fans oppose FRB, it is surely not "meaningless" to observe that a pure Bitcoin standard would invite occasional recessions and depressions in a world of fluctuating money demand and rigid wages.