BitCoin Or Precious Metals: The Eternal Libertarian Debate

I was discussing a recent article I’d written on the benefits of the bi-metallic vs. tri-metallic standard with our good friend Rodney when he said, “It sounds good, but most people here love BitCoin.” That’s when I decided it might be worth sharing my thoughts on the liberty value of precious metals and BitCoin.

While I love both, and have both, I recognize that each has it’s own place in our ever-evolving economy. Each option provides key strategic value to taking back our liberty!

BitCoin made of precious metals

The value of BitCoin

Without a doubt, BitCoin has made a powerful push into the liberty community. It has the power to cross borders and floats freely against other currencies. It’s a capitalist dream in many ways. It meets most of the standard properties of what make a currency functional. It’s transferable, portable, devisable, and has a recognizable value.

In my opinion, I believe that there is a good chance that it will be the norm one day. It’s got all the key functions of the very same credit cards that most Americans use every day.

To me, the real value of BitCoin is the drive in adaptation that it has given to the block chain itself. The possibilities of openness and transparency brought in by the block chain could provide us with a revolution in government and individual accountability.

But there are some problems

The added benefit that, with the proper legwork, it can be anonymous is a key concern of most libertarians. But this is a two way streak and really not as valuable as most people think. Yes, your BitCoins can be stored and moved freely with the right precautions. However, it only takes one kink in the system to make your coin traceable. If BitCoin ever takes off as a regularly used currency, it will be easy for a government or other agency to track those sales back to a physical location or person. As long as you only make transactions with others taking proper security measures, you should be fine. But the moment you make a purchase at Pizza Hut, you’re on list.

BitCoin has another potentially fatal flaw. As Libertarians, we tend to want to do our own thing and rely on others as little as possible. BitCoin, however, depends on a lot of other systems. Much like a credit card, it relies on a ledger, the Internet, and all the things that go into connecting those systems.

The advantages and disadvantages of precious metals

Precious metals like gold and silver hold the same basic properties of currency as BitCoin. They also hold one more in that they are durable. While the durability of BitCoin can be argued in terms of data, BitCoin is really not something that you can hold in your hand.

Additionally, with precious metals there is no ledger. Much like using physical dollars instead of credit cards, there’s no way to really track where a specific coin comes from. Tracking a precious metal coin would require interviewing a chain of store clerks to see if they remember that specific coin. Not only would they need to remember each coin, but they would need to know the individual who gave it to them. You can see how difficult this becomes.

Precious metals also have a long history of functioning as a currency and their value isn’t likely to decline. Because BitCoin is the newcomer, it’s still very speculative and is yet to be seen how it will stand the test of time.

The struggles of precious metals

One real disadvantage to precious metals is that it is less transferable than BitCoin. By that, I mean that you’d struggle to purchase anything over the Internet. While there are places you can purchase products using gold and silver online, this requires you to send the coins through the postal service prior to you product being shipped.

You may also find it difficult to move large amounts of gold or silver for large purchases such as a new home. While this is certainly possible, this ability to transfer large amounts was what led to deposit notes (and banks) to begin with.

So which is really better?

I prefer to barter in precious metals whenever I can. I can appreciate more their intrinsic value and I like the anonymity it provides. It’s also a great way to share your story about liberty without having to bang people over the head. When someone sees you paying with precious metals, their curiosity is naturally peaked. Even now, when I see someone paying with silver I want to talk to that person. It’s likely that we have more in common than not.

There are of course the Internet transactions that just aren’t feasible with precious metals. In these cases, I tend to lean towards BitCoin. It’s incredibly convenient and easy to use wherever it’s accepted.

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