100 years ago, Henry Ford proposed ‘energy currency’ to replace gold

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

100 years ago, Henry Ford proposed ‘energy currency’ to replace gold
Entrance web page of the New York Tribune dated Sunday, December 4, 1921. Supply: Library of Congress

Bitcoin as an vitality foreign money

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 biggest energy plant” and creating a brand new foreign money system primarily based on “items of energy.”

Ford, who based Ford Motor Firm in 1903, instructed the publication:

“Underneath the vitality foreign money system the usual could be a certain quantity of vitality exerted for one hour that will be equal to at least one greenback. It’s merely a case of pondering and calculating in phrases totally different from these laid all the way down to us by the worldwide banking group to which we’ve got grown so accustomed that we predict there isn’t any different fascinating commonplace.”

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

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

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Changing gold, ending wars

On the relation between gold and struggle, Ford defined:

“The important evil of gold in its relation to struggle is the truth that it may be managed. Break the management and also you cease struggle.”

A few of Bitcoin’s most ardent helps imagine the cryptocurrency’s sound cash ideas may eradicate struggle by decreasing the state’s capacity to fund battle via inflation. Whereas a gold commonplace makes it more durable for governments to inflate their foreign money, “worldwide bankers,” as Ford defined, managed the majority of the bullion provide. This technique of controlling and accumulating valuable commodities allowed monetary elites to create an lively marketplace for cash, which thrived throughout wartime.

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

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