White House Says Gold Reserves May Be Used to Purchase Bitcoin

The presence of a growing community that are willing to accept it for good and services.

> why the gold-standard died..

You don't want the entire economy of a country to be based on capped assets. That would limit the size of your economy. But such assets can work well as a reserve. Gold works because of its intrinsic value, and is not dependent on the presence of a community that accept it. But its intrinsic value can disappear overnight. Bitcoin works as reserve because of the presence of a growing community that accept it, and is dependent on the community. But its value would not disappear and is only decided and ensured by the community.

So it really a matter of reaching community wide consensus. Bitcoin have it right now and there is no fundamental reason why it would lose its value. Sure governments can ban it, and it ll lose its value. But if the government itself is holding reserves in it, then we can be pretty sure that that would not be done.

So to answer your question, gold standard died because it would limit the size of the economy that it can support, because supply of gold is limited.

Value comes from people and the work they do. A currency, or a system of money, or let us speak plainly, a system of economy tracks the value provided by a person to the community. If you have 100$ with you, that means that you have done 100$s worth of work for the community. Same with bitcoin, if you have 100 bitcoins with you, that is a proof that you have done that much work for the community. And you are entitled to the same amount of work from the community. You redeem it by paying with this currency, the other people of the community for their services.

So in otherwords, paper currency is just a distributed ledger. Instead of a ledger with some values written in a piece of paper against your name, you just hold the corresponding amount of paper currency to prove the work that you have done. When you consider all the currency held by a the people in a community, it is really a ledger that is distributed over the people in that community.

A bitcoin economy can work exactly like this. Fundamentally because in reality, in a real economy, you are not storing the value, you are tracking it.

This makes sense, because an economy really is a system that enables people helping each other, ensuring that no one takes more than they provide, or have to provide more than they take.

I'm adding that to my stock of meetings comments.