This is the third post, in a series of four. If you haven't read the second post, click here:

Precisely due to its nature of being born from below, gold met enormous resistance, let us remember the confiscation which took place in the USA, in 1933 below, as well as in Mussolini's Italy, in 1935, and in India in 2016.

The adoption of bitcoin, as well as the many cryptocurrencies born later, seem to trace a history similar to gold. They are decentralized currencies, therefore not managed by a centralized institution, such as a central bank or a government.

Cryptocurrencies, such as bitcoin, being in limited availability, tend to be deflationary, and not manipulable, so they seem to work like gold when it was used as a currency.

Are bitcoin, and other crypto, taking us back to the golden age?

In summary, retracing the history of gold, it was considered an ideal metal for the creation of coins, due to its characteristics, but in later times, banknotes gradually replaced gold coins.

The first banknotes were certificates convertible into gold, that is, they were representative of a certain quantity of gold, deposited in a bank. So the banknotes had a gold cover, initially guaranteed by private individuals, and then later by kings, governments and central banks. In more recent times, gold has been downgraded, as an instrument of monetary policy, to give life to the current fiat money system, therefore not tied to strict constraints, dictated by the old gold standard.

Fiat coins are unrelated to any underlying, so they are created out of thin air, and have no intrinsic value.

The only thing that gives value to fiat money is the trust in it, placed by those who use it.

Today in democratic countries, the creation and management of money has been transferred from the state to central banks, which are independent bodies, in order to avoid abuse or mismanagement by governments.

See you tomorrow for the fourth post.

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