Why was the gold standard adopted (1873)? How is Bitcoin similar to the gold standard?

Expert Solution

Nearly all countries adopted the gold standard because :

1)All countries can fix the value of their respective countries currencies in terms of specified amount of gold or.

2)They can link their respective countries currencies to that of a country which did so

3)The domestic currency can freely convert into gold at a specified fixed price

4)No restriction of export or import of gold

Gold is a physical commodity and bitcoin is a digital asset though such a difference between gold standard and bitcoin is present but there is some similarlity between gold standard and bitcoin,which includes :

1)Both the bitcoin and gold standard does not belong to any specific country.

2)Both the bitcoin and gold standard serves as international base money.

3)Both the bitcoin and gold are characterised as "alternative investment" options

4)Both the bitcoin and gold may have limited supply that can be increased gradually as result of mining.

Rahul Sunny answered 2 years ago

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