Bitcoin: The prophecy has been fulfilled!

Bitcoin (BTC) needs no introduction. It particularly attracts attention as it is the most popular cryptocurrency on the market. But Bitcoin is also a revolutionary asset that has changed our perception and also our relationship with money. Today, it is increasingly accepted that currency can not only be fiduciary and material but also digital and virtual, thanks to the emergence of Bitcoin in 2008. However, the almost miraculous appearance of Bitcoin was not an accident. Three visionaries, namely Milton Friedman, Friedrich A. Hayek, and Henry Ford, had predicted it. This article looks back at these prophets who foretold what some like to call “digital gold.”

Milton Friedman and His Revolutionary Monetary Ideas

One paradoxical thing about prophecies is that when they are made, they are met with disbelief by the prophet’s contemporaries. One can imagine that the famous economist Milton Friedman faced such pushback for his revolutionary ideas, especially regarding the flagship crypto, Bitcoin. Although he is not directly named among the creators of this digital currency, he is undoubtedly one of the thinkers who discussed its appearance. Years before the revolutionary emergence of Bitcoin, Milton Friedman had already envisioned the rise of digital currencies.

The expert’s foresight was expressed in an interview in 1999. In this conversation, Milton Friedman prophesied a future where the Internet would play an essential role in reducing state intervention. The economist predicted the advent of electronic currencies facilitating anonymous transactions—a revolutionary concept at the time that prefigured the impact of cryptos like Bitcoin.

Milton Friedman’s prediction highlighted on the one hand the potential of digital currencies to improve the privacy and efficiency of financial transactions. But it mainly underscored their broader implications for economic freedom. Coincidentally, the expert’s prophecy encapsulates the very essence of a reliable electronic money system that enables transparent funding transfers without revealing the identities of the parties involved.

It is safe to say that Friedman’s contributions to economic theory have found a deep echo in the realms of crypto and blockchain. He recognized that the Internet would disrupt traditional government revenue streams, especially tax collection, thus paving the way for decentralized financial systems. These intuitions were confirmed with the advent of Bitcoin, orchestrated by the mysterious Satoshi Nakamoto.

The appearance of the flagship crypto signaled a paradigm shift in the financial landscape, embodying the principles of decentralization and electronic currency envisioned by Friedman. This transformative innovation catalyzed the development of new financial technologies, supporting economic freedom and innovation. Transcending his era, Milton Friedman’s foresight offered a premonitory glimpse of the future of digital finance. His vision of decentralized currencies and electronic money now serves as a cornerstone for understanding the profound impact of cryptos on the modern economy. Another seasoned economist also predicted the emergence of Bitcoin. That would be Friedrich A. Hayek.

The Avant-Garde Vision of F. A. Hayek Paving the Way for Bitcoin

Hayek’s ideas, particularly his allusion to a concept reminiscent of the flagship crypto, illuminate the trajectory of monetary innovation. Indeed, they foreshadow a future monetary landscape characterized by decentralized currencies. In a notable video from 1984, Hayek discussed the evolution of money, lamenting state interventions that stifled its development. He expressed skepticism about traditional monetary policies, advocating instead for the “denationalization of money.”

The idea was revolutionary for its time, considering the accepted notion that currency is one of the attributes of a country’s sovereignty. The Nobel laureate in economics, like Milton Friedman, envisaged a future where the free market would dictate the creation, allocation, and monitoring of money—an evolution that today has become a reality.

Hayek had notably proposed a privatization project for currency issuance, advocating a laissez-faire approach to monetary governance. Following this advocacy, initiatives such as the Liberty Dollar and E-gold emerged but eventually encountered regulatory hurdles and were ultimately abandoned.

Hayek did not live long enough to see his ideas come to fruition. However, the fact remains. Bitcoin appears in many ways as a manifestation of his vision. Notably, it operates without a centralized authority and has introduced a decentralized accounting system, echoing Hayek’s call for monetary denationalization. Bitcoin embodies the idea of Hayek to foster innovation through indirect means, bypassing established regulatory frameworks.

Fundamentally, F. A. Hayek’s foresight paved the way for the unprecedented rise of Bitcoin. This illustrates the profound impact of visionary economic thought on modern monetary evolution. His advocacy for decentralized currencies continues to resonate and shape the discourse on the future of finance and monetary governance.

Henry Ford, the Pioneer of the Energy-Based Currency Concept

Over a hundred years ago, Henry Ford, known as the industrialist and founder of the famous automobile brand that bears his name, had a premonition. He envisioned an “energy currency” capable of transcending geopolitical conflicts and redefining global finance. “Ford would replace gold with an energy currency and put an end to wars,” headlined an article in the New York Tribune published on December 4, 1921.

Later on, Henry Ford presented his revolutionary concept of energy currency. His central idea: to harness energy, measured in kilowatt-hours, as a tangible and scarce asset, to support the value of a digital currency. That is approximately what Satoshi Nakamoto realized to materialize Bitcoin.

It must be said that Henry Ford’s idea was not just the wild imaginings of a wealthy idler. Indeed, Ford went beyond mere theoretical speculation by identifying the Muscle Shoals Dam as potentially relevant to implement his ambitious initiative. For the record, the Muscle Shoals Dam, located along the Tennessee River with its abundant energy production, embodied Ford’s vision. He wanted to exploit its natural potential to drive a new era of financial innovation.

Henry Ford’s energy currency never materialized as originally envisioned. However, his visionary ideas resonate deeply within the context of the current evolution of digital currencies. Decentralized cryptos like Bitcoin, championed by luminaries such as Friedrich Hayek and Milton Friedman, have a specific characteristic. They embody the principles of scarcity, autonomy, and resilience promoted by Ford.

Currently, these digital currencies offer a compelling alternative to traditional monetary systems, challenging the supremacy of gold and fiat currencies. The rise of Bitcoin as a store of value and a means of exchange underscores a certain “growing desirability of moving away from gold” among investors and the public at large.

This signals a paradigm shift towards decentralized financial systems. As the world witnesses the growing adoption of cryptocurrencies and blockchain technology, Ford’s premonition recalls the transformative potential inherent in bold ideas. His vision may have been ahead of its time, but its enduring relevance underscores the timeless pursuit of innovation and progress, especially in the realm of finance.