The Cross of Electrons

On July 9, 1896, William Jennings Bryan delivered what many historians consider the greatest political speech in American history - his famous "Cross of Gold" speech. 

At the time, the United States dollar was unofficially on the gold standard used by major trading nations. This made trade simpler, but limited the money supply, leading many businessmen and economists to advocate for "bimetallism," or the coinage of silver as well as gold. Mr Bryan, seeking the Democratic nomination for president, was a strong advocate for the free coinage of silver, as opposed to his Republican opponent, William McKinley*, who advocated remaining on the gold standard. Although Mr Bryan eloquently insisted in his famous oration that "you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold," he lost the election of 1896 to Mr McKinley, who officially placed the United States on the gold standard in 1900. The nation remained on the gold standard until 1933, when President Franklin Roosevelt ended it for domestic transactions, and 1971, when President Richard Nixon ended the international convertibility of the dollar to gold, effectively ending the gold standard for global transactions. The dollar is now considered a "fiat currency," with its value determined by market forces rather than the value of a physical commodity like gold. 

And now we find ourselves in 2025, when a new form of currency has arisen - the so-called "cryptocurrencies" like Bitcoin, the value of which is tied not to some physical asset, but to the market forces of supply and demand.

I wrote about cryptocurrencies in March of this year, when I commented on Der Furor's royal decree Executive Order 14233, "Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile." I noted at the time that there were six attributes a fiat currency (like the dollar) required to be acceptable as a medium of exchange:

Durability - it must stand up to use;

Portability - it must be able to be moved around as needed;

Divisibility - it must be conveniently divisible into smaller units as needed;

Uniformity - each unit must look like and have the same value as every other unit;

Scarcity - the value is shored up by limits imposed on the quantity available; and,

Acceptability - users both at home and in other countries agree to take it as payment.

One can argue whether any cryptocurrency meets those requirements, as I discussed in my earlier post. All things considered, I don't believe that cryptocurrencies (at least, as they now exist) are a viable unit of exchange. Of course, I'm hardly an expert on the topic ... but then again, neither is Der Furor or anyone in his fiscal entourage.

And an economy weakened by economic blows like the ongoing tariff chaos and relentless focus on tax reductions drives investors from the dollar, once the world's preferred reserve currency, to alternatives like cryptocurrencies ... benefiting those who produce or invest in those cryptocurrencies. Like Der Furor, oddly enough. 

I fear we are no longer in danger of being financially crucified on a cross of gold, but rather on a cross of electrons.

I wonder what Mr Bryan would have had to say if he were giving his famous speech today.

Have a good day. Don't take any wooden nickels. Or electronic ones, either. More thoughts coming.

Bilbo

* Mostly remembered today for his advocacy of tariffs and consequent deification by Der Furor.