Free Money: Bitcoin and the American Monetary Tradition

America in its heyday had private money—Bitcoin is seeing to it that this heyday returns.

Bitcoin is private money. We needed private money again, and Bitcoin came to provide it. Bitcoin’s function, characteristics, architecture, and appeal pertain not only to our own time. Bitcoin clarifies so much we have forgotten, or have never known, about our monetary history: that private money, made for a profit, is the money of economies that really move. Over time, these populations become legendarily prosperous.

American history is perfectly clear that private money hastens economic wonders. The United States had private money for most of its past—for generation upon generation, into the twentieth century. And under private money, the American economy became the greatest in history, the leading edge of the apex of the industrial revolution. Non-governmental currency, no Federal Reserve, and money defined as weights of gold or silver—these centered the monetary system when the United States reached its peak economic heights.

Bitcoin’s remarkable story parallels American monetary history. In the era before the Fed and big government, innovations in private money were the lifeblood of the currency and credit system. As a result, the American economy grew like gangbusters.

The charge that Bitcoin is not real money founders against the historical record. Bitcoin is uncannily resonant with the American monetary system at its historical best when, as a free money system, it worked to something approximating perfection. Bitcoin’s prospects for commanding the monetary system of the twenty-first century are outstanding, because not only is this new money innovative—it is traditional.