Cryptocurrency and Goldbugs
For years I’ve been listening to cranks talk about how fiat money is worthless and how we should return to the gold standard. Now, I’m not an economist, and I have only the most rudimentary understanding of economics as a field, but I do understand one simple economic principle: value isn’t inherent in anything, value is imposed by common interest. As I understand it, gold became a value standard in part because of its beauty but also because of its rarity. Aluminum (aluminium for you fans of the mother tongue) was once the province of kings because of its rarity before we learned to pull it out of the very soil. We prize things that are difficult to get, which is the argument goldbugs use to explain why paper, or “fiat” currency is trash. How can paper money be valuable when all we need to do is give ourselves permission to print more of it? That brings us to cryptocurrency. In 2008 someone introduced the idea of a digital currency that requires computer resources to “mine” the comp...