đ The Bridge We Had to Cross
FIRE BTC Issue # 28 - Gold couldnât keep up. Fiat filled the gap. Bitcoin finishes the job.
For thousands of years, gold served as the foundation of monetary trust. It wasnât fast, but it was fair. Gold couldnât be printed, and it couldnât be easily manipulated. Under the classical gold standard, especially during the 19th century and the Industrial Revolution, the world experienced unprecedented growth in productivity, innovation, and living standards.
But gold had limits. And the modern world eventually ran into them.
đ Gold couldn't keep up
As trade expanded across continents and communication leapt forward, from steamships to telegraphs to the internet, goldâs physicality became a burden. It was too heavy, too slow, too costly to assay and move. Final settlement couldnât match the speed at which commerce now needed to happen.
But the breakdown wasnât just technical â it was political.
The first major cracks appeared during World War I. Nations couldnât afford to be constrained by gold when their survival was at stake. They suspended convertibility, printed money to fund war efforts, and never fully went back. World War II reinforced the trend. The postwar Bretton Woods system tried to restore monetary order through gold-dollar convertibility, but even that eventually collapsed.
In 1971, President Nixon ended the dollarâs peg to gold unilaterally and permanently. It was a top-down political act, but one the world largely accepted. Why? Because fiat solved a problem.
đ¸ Fiat solved the gold problemâŚbut created others
Fiat money, issued by governments and expanded through commercial bank credit, enabled the speed, flexibility, and scale that gold couldnât deliver. It allowed for instant communication of value, for complex credit systems, and for governments to respond to crises in real-time. It played a key role in expanding trade, lifting billions from poverty, and building the modern global economy.
But this came at a cost.
Fiat is controlled money. It is permissioned. Only a few actors (central banks, governments, commercial banks) can create it, and they do so first and foremost for themselves. The result has been rampant monetary expansion, distorted price signals, and growing inequality.
Fiat enabled massive, prolonged wars. It fueled debt cycles of increasing volatility. It trained society to think short-term, because saving fiat money is punished through debasement. And it allowed power to centralize in ways that wouldâve been impossible under a sound money standard.
In other words: fiat solved goldâs speed problem, but broke its fairness.
đˇ Bitcoin: Completing the bridge
What gold lacked in speed, fiat provided. What fiat lacked in integrity, gold had in abundance. Until recently, there was no way to unify both.
Now there is.
Bitcoin offers a new monetary foundation: digital, global, and sound. It restores the fixed-supply discipline of gold, while delivering the speed and communication advantages of fiat. It is trustless, permissionless, and resistant to manipulation. And because it cannot be inflated or altered by decree, it levels the economic playing field.
Bitcoin encourages low time preference. It rewards saving. It allows capital to form based on actual market signals without distortion by credit binges or interest-rate manipulation. And while it doesnât replicate every layer of fiatâs complex credit infrastructure, it offers a sound base layer upon which healthier, more voluntary systems can be built.
It gives us the best of both worlds without the worst of either.
đ¤ But didnât gold fail? Why would bitcoin be any different?
Gold was sound money too. Disciplined, scarce, and global. And yet it failed to withstand political pressure. When governments needed to override its constraints, especially during wars, they simply did. Why wouldnât the same thing happen again?
The answer lies in architecture.
Goldâs fatal flaw wasnât just slowness. It was seizability. Gold lives in vaults. It must be physically stored, transported, and audited. That makes it vulnerable to centralization and control. If gold is your money, power can always seize it, because gold has to be trusted to intermediaries.
Bitcoin is fundamentally different.
It doesnât exist in vaults. It lives in code, secured by cryptography, validated by a global decentralized network, and accessible without permission. It can be self-custodied anywhere in the world, by anyone, with nothing but a phone and a password. It settles final payment directly, without intermediaries or trusted third parties.
Where gold was vulnerable to coercion, bitcoin is anti-fragile. The more it is attacked, the more resilient it becomes. Itâs not just a better form of money â itâs a new form of property rights.
âł Fiat was the bridgeâŚbut it's time to cross
Despite the clear bad effects of the fiat system, it served a much-needed purpose. It was a compromise, a bridge. Faced with the limitations of gold and the absence of a digital alternative, society (both governments and markets) chose fiat to keep progressing.
That evolution has had consequences. But it also bought us time.
Fiat allowed humanity to build global systems of trade, communication, and coordination. It got us to the digital age. And now that we're here, we have something gold could never be: a digitally native, credibly scarce, globally accessible money.
Bitcoin completes the arc.
It doesnât erase the past. It transcends it, honoring what worked, leaving behind what didnât, and giving us a new foundation to build something far more sustainable, just, and free.
Thatâs it for this week. Thanks for reading!
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Trey âď¸