When I was a sophomore in high school, I had a group project in my Latin class that involved making movies of some of the stories from the Aeneid. My group put in charge of the recording and editing of the films and I made use of the adapter that took RCA inputs and fed them into the computer (no, not a USB) as well as some editing software and the DVD-RW drive. Proud of my use of technology, I brought the finished DVD to class the day it was due excited to show off what we did.
Everyone in the class was excited to watch the videos that we all made, which were all sure to be disasters. But when I handed the DVD to my teacher, he looked at it and said, “I don’t think I can play this.”
We did not have a DVD player and so I went home that night and copied the DVD to a VHS tape.
Following me jumping the gun on DVDs, it didn’t take too much time to pass for VHS tapes to become virtually obsolete. Because of their superior qualities, DVDs replaced them in the marketplace. Did that mean that VHS tapes were bad? Well, relative to DVDs (and the subsequent technology), they aren’t that great. When they were the state-of-the-art technology, however, they served their purpose very well. But there was a sunset for VHS and there was a gradual shift away from them that happened in a way that was fairly smooth for most people.
Gold is like the VHS tape of sound money and Bitcoin is the DVD (yes, I know that DVDs have been surpassed but that’s not important for the sake of this discussion). The movement away from the gold standard to a fiat system has proven that gold has some flaws that made the fiat system possible. But that was only a problem once the flaws in gold could be exploited. Much like the VHS tape during its heyday, no one can deny the massive benefits brought forth to society via using gold as money. While we can point to its current flaws, it doesn’t take away from the fact that the gold standard was instrumental in bringing about much of the economic advancement that we enjoy today.
Bitcoin is just better. That shouldn’t be seen as a knock against gold, but instead as a celebration of ingenuity and innovation. But it will take time for Bitcoin to become money and universally accepted, and that’s okay. My teacher couldn’t accept my DVD as a form of media, but you would have to be crazy to say that it made the DVD a failure. The world just hadn’t accepted the DVD as the standard video playback media yet. The same applies to Bitcoin when people criticize it for its lack of adoption as a medium of exchange at this current stage. Transitions take time and it would be crazy to assume that the adoption of Bitcoin as a demanded form of payment would happen overnight.
But do keep an eye out. The adoption of the Bitcoin standard may happen sooner than you might think.