At the Dubai Blockchain Week, Zhao Changpeng (CZ) stated in a heated discussion with gold enthusiast Peter Schiff that Bitcoin is a "better version of gold" and not a substitute, which caused a huge response and discussion in the square. The author has always believed that Bitcoin is the only value object that can surpass gold in the virtual dimension after the internet appeared. Gold has ruled the blue planet for thousands of years, even longer, but once civilization on the blue planet introduced the internet and virtual worlds, the physical limitations of reality, which couldn't find anything better than gold, would be broken. People can create a better version of gold in the virtual digital world, and from now on, that version is BTC!
CZ's quotable quotes
"I do not oppose gold; I just believe Bitcoin is a better 'version of gold'"
"Tokenized gold requires trust in third parties - even if the management team changes, decades later or during wars, they will still give you gold"
"Bitcoin can do everything gold and fiat can do, and even more - Lightning Network, smart contracts, and other programmable features"
Today, we will look at an incredible decree from another perspective to examine the events surrounding gold and Bitcoin on this planet; of course, Bitcoin had not yet been created back then. Let's assume what would happen if BTC existed in that era? With that assumption, let's examine this decree and that era; it might provoke some thoughts.
From 1925 to 1929, the Dow Jones Industrial Average surged dramatically, but the rise in stock prices was not supported by corporate profits; the average price-to-earnings ratio of the stock market far exceeded historical averages (doesn't it resemble the current U.S. stock market?). Meanwhile, leveraged speculation spiraled out of control, with margin trading allowed, and banks also invested depositors' funds into the stock market. On October 24, 1929, 'Black Thursday', the stock market crashed, and by July 1932, the Dow had plummeted 89% from its peak in 1929.
U.S. banks engaged in mixed operations, investing depositors' funds into high-risk stock markets and real estate. After the stock market crash, bank assets plummeted, triggering a bank run. From 1929 to 1933, a total of 9,000 banks failed, and depositors lost over 14 billion dollars, with the money supply dropping by 31%, leading the U.S. into what is historically known as the Great Depression.
At that time, newly elected President Roosevelt took office, launching a series of so-called New Deal policies aimed at saving the U.S. economy. Among them, Executive Order 6102 was signed and implemented by Roosevelt on April 5, 1933 (presidential executive order).
Executive Order 6102 (core implementation plan)
Scope and duration of confiscation: Hoarding of gold coins, gold bars, and gold certificates within the continental United States is prohibited; individuals/institutions are required to surrender excess gold to the Federal Reserve by May 1, 1933, at an exchange rate of $20.67 per ounce.
Exemption clause: Individuals may retain gold valued at no more than $100 (approximately 5 ounces); collectors of rare coins, jewelers/dentists/industrial gold may be exempt.
Penalties: Violation can result in up to 10 years in prison, a fine of $10,000, or both.
Execution results: A large amount of gold flowed into the central bank, paving the way for subsequent monetary reforms.
Seeing this, did anyone else immediately think, 'Who knows, I might be hiding it secretly'? Rest assured, there will be specialists using metal detectors to search everywhere; once discovered, the act of hiding could lead to long-term imprisonment. Who would want to take such a risk? Moreover, the government is acquiring your gold at the market price of $20.67 per ounce, not just seizing it for free.
But the incredible thing is that from April 5, 1933, to April 4, 1934, the official price of gold soared from $20.67 per ounce to $35 per ounce, an increase of 69%. This change was entirely enforced by the U.S. government through executive orders and legislation, rather than being formed spontaneously by the market.
In other words, the dollars you exchanged for gold initially lost more than half of their purchasing power within a year, and you had to watch it happen, with most ordinary people not even noticing this change. In today's China, with the state advancing and private sectors retreating, there are still many people complaining daily about government dissatisfaction in the square. If you found yourself in the U.S. at that time, which claimed to be the lighthouse of human civilization, a free nation where private wealth is sacred and inviolable, what would you think?
The only thing I can think of is how great it would be if Bitcoin existed back then! Perhaps at this point, you might begin to understand the significance of a decentralized ledger that does not rely on any organization and the blockchain network, which represents true freedom and is inviolable!
And this is just one advantage of Bitcoin compared to gold; in the next issue, I will comprehensively explain why it is only after the advent of the internet in human history that a better gold than gold could emerge. Stay tuned!
