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100 years in the past, Henry Ford proposed ‘energy currency’ to replace gold

In 1921, American industrialist Henry Ford proposed the creation of an “energy currency” that might type the idea of a brand new financial system — providing hanging similarities to the peer-to-peer digital money system outlined in Satoshi Nakamoto’s 2008 Bitcoin (BTC) whitepaper. 

Front page of the New York Tribune dated Sunday, December 4, 1921. Source: Library of Congress

Bitcoin as an energy currency

On Dec. 4, 1921, the New York Tribune published an article outlining Ford’s imaginative and prescient of changing gold with an vitality foreign money that he believed may break the banking elites’ grip on international wealth and put an finish to wars. He meant to do that by constructing “the world’s greatest power plant” and creating a brand new foreign money system primarily based on “units of power.”

Ford, who based Ford Motor Company in 1903, informed the publication:

“Under the energy currency system the standard would be a certain amount of energy exerted for one hour that would be equal to one dollar. It’s simply a case of thinking and calculating in terms different from those laid down to us by the international banking group to which we have grown so accustomed that we think there is no other desirable standard.”

The specifics round foreign money values “will be worked out when Congress cares to hear about it,” he stated.

Although Ford was by no means ready to advance his imaginative and prescient of a fully-backed foreign money, Bitcoin has seemingly vindicated the concept a century later. Since 2009, greater than 18.8 million BTC have been created via energy-intensive mining that requires computer systems to resolve more and more advanced math issues. This proof-of-work mining course of has drawn heavy criticism over its alleged environmental affect — a short-sighted declare that ignores Bitcoin’s abilily to speed up the shift to renewable vitality.

Related: Satoshi Nakamoto statue goes up in Budapest

Replacing gold, ending wars

On the relation between gold and struggle, Ford defined:

“The essential evil of gold in its relation to war is the fact that it can be controlled. Break the control and you stop war.”

Some of Bitcoin’s most ardent helps imagine the cryptocurrency’s sound cash rules may eradicate struggle by decreasing the state’s potential to fund battle via inflation. While a gold customary makes it more durable for governments to inflate their foreign money, “international bankers,” as Ford defined, managed the majority of the bullion provide. This means of controlling and accumulating valuable commodities allowed monetary elites to create an energetic marketplace for cash, which thrived throughout wartime.

The remnants of the gold customary had been deserted in 1971 by U.S. President Richard Nixon, who stated his authorities would quickly droop convertibility between {dollars} and bullion. The so-called quasi-gold customary would final till 1973, with all definitions linking the greenback to bullion eliminated by 1976. However, in impact, the gold customary system was eradicated by the British authorities in 1931, with the U.S. following swimsuit two years later.

Related: Bitcoin set to replace gold, says Bloomberg strategist on Bretton Woods’ fiftieth anniversary

The New York Tribune article circulated on Reddit’s r/CryptoCurrency web page on Saturday, the place it acquired appreciable upvotes. While Satoshi Nakamoto by no means talked about Henry Ford in on-line discussion board posts, some Reddit customers speculated that Bitcoin’s creator might have been influenced by the late industrialist. Others jokingly stated Satoshi was truly Ford’s reincarnate, given the latter’s obvious perception in reincarnation.