100 years ago, Henry Ford proposed an “energy currency” to replace gold
In 1921, American industrialist Henry Ford proposed the creation of an “energy currency” which could form the basis of a new monetary system – offering striking similarities to the peer-to-peer electronic money system described in the 2008 Bitcoin (BTC) white paper by Satoshi Nakamoto. .
Bitcoin as an energy currency
On December 4, 1921, the New York Tribune published an article describing Ford’s vision of replacing gold with an energy currency that he said could break the hold of the banking elites on global wealth and end wars. He intended to do this by building âthe world’s largest power stationâ and creating a new monetary system based on âunits of powerâ.
Ford, who founded Ford Motor Company in 1903, told the publication:
âIn the energy currency system, the norm would be a certain amount of energy exerted for an hour which would be equivalent to a dollar. It is simply a matter of thinking and calculating in different terms from those imposed on us by the international banking group to which we have become so accustomed that we believe that there is no other desirable standard.
Details of the currency values ââ”will be worked out when Congress wants to hear about it,” he said.
Although Ford was never able to advance its vision of a fully secured currency, Bitcoin apparently confirmed the idea a century later. Since 2009, more than 18.8 million BTC have been created through energy-intensive mining that requires computers to solve increasingly complex math problems. This proof-of-work mining process has drawn strong criticism over its alleged environmental impact – a short-sighted claim that ignores Bitcoin’s ability to accelerate the switch to renewables.
Replace gold, end wars
On the relationship between gold and war, Ford explained:
âThe essential evil of gold in its relation to war is the fact that it can be controlled. Break the control and you stop the war.
Some of Bitcoin’s most ardent supporters believe that the sound monetary principles of cryptocurrency could eliminate war by reducing the state’s ability to finance conflict through inflation. While a gold standard makes it harder for governments to inflate their currencies, âinternational bankers,â as Ford explained, controlled most of the bullion supply. This process of control and accumulation of precious commodities allowed the financial elites to create an active market for money, which flourished in times of war.
The remnants of the gold standard were abandoned in 1971 by US President Richard Nixon, who said his government would temporarily suspend convertibility between dollars and bullion. The so-called quasi-gold standard would last until 1973, with all definitions relating the dollar to bullion being abolished in 1976. However, in reality, the gold standard system was abolished by the British government in 1931, with the United States following suit two years later.
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The New York Tribune article circulated on Reddit’s r / CryptoCurrency page on Saturday, where it received considerable upvotes. While Satoshi Nakamoto never mentioned Henry Ford in any online forum posts, some Reddit users have speculated that the creator of Bitcoin may have been influenced by the late industrialist. Others have joked that Satoshi was in fact Ford’s reincarnation, given the latter’s apparent belief in reincarnation.