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100 years in the past, Henry Ford proposed ‘power forex’ to exchange gold

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In 1921, American industrialist Henry Ford proposed the creation of an “power forex” that would type the idea 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. 

Entrance web page of the New York Tribune dated Sunday, December 4, 1921. Supply: Library of Congress

Bitcoin as an power forex

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

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

“Beneath the power forex system the usual can be a specific amount of power exerted for one hour that might be equal to 1 greenback. It’s merely a case of pondering and calculating in phrases completely different from these laid all the way down to us by the worldwide banking group to which we now have grown so accustomed that we expect there is no such thing as a different fascinating customary.”

The specifics round forex values “can be labored out when Congress cares to listen to about it,” he mentioned.

Though Ford was by no means in a position to advance his imaginative and prescient of a fully-backed forex, Bitcoin has seemingly vindicated the thought a century later. Since 2009, greater than 18.8 million BTC have been created by way of an energy-intensive mining course of 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 influence — a short-sighted declare that ignores Bitcoin’s abilily to speed up the shift to renewable power.

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Changing gold, ending wars

On the relation between gold and warfare, Ford defined:

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

A few of Bitcoin’s most ardent helps consider the cryptocurrency’s sound cash rules may remove warfare by lowering the state’s capability to fund battle by way of inflation. Whereas a gold customary makes it tougher for governments to inflate their forex, “worldwide bankers,” as Ford defined, managed the majority of the bullion provide. This strategy 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 customary have been deserted in 1971 by U.S. President Richard Nixon, who mentioned his authorities would briefly droop convertibility between {dollars} and bullion. The so-called quasi-gold customary would last till 1973, with all definitions linking the greenback to bullion eliminated by 1976. Nonetheless, in impact, the gold customary system was eradicated by the British authorities in 1931, with the U.S. following go well with 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 might have been influenced by the late industrialist. Others jokingly mentioned Satoshi was truly Ford’s reincarnate, given the latter’s obvious perception in reincarnation.