Genesis Mining has conducted a study to find out how many Americans know about their own dollar. Apparently about 30% of the American public believe that the dollar is still supported by gold.
End of the gold standard
The Bretton Woods system ended in 1971, which means that the dollar was officially disconnected from gold. This made the dollar fiduciary money. The currency derives its value from the confidence that goods and services can be purchased with it no longer from an underlying scarce commodity.
As you can see below, the purchasing power of the dollar has dropped considerably since the release of the gold standard.
Gold and government
Yet there is a large group of Americans who still have the impression that gold still guarantees the value of the dollar.
Genesis mining offers cloud mining services and they thought it was time for a survey to find out what Americans know about their own currencies. The survey consists of 23 questions and one of those questions was about supporting the dollar. These are the answers:
- 29.3% of the public believe that the dollar is supported by gold
- 30.1% say the government guarantees the value
- 5.8% said bonds
- 4.1% said oil
- 23.6% said they had no idea
- 7.1% skipped the question
Worrying results
The results are interesting. The misconception that gold determines the value of the US dollar, and that a quarter of respondents say they have no idea, is worrying. But that 4.1% of Americans think it is oil is even more dangerous.
A large part of the public still lives with the idea that a currency is supported by a commodity such as gold. That was the case decades ago.
From fiat to bitcoin
We do not know what Europeans think about our money, but the results of the survey can be useful to understand how you can explain bitcoin to someone here in the Netherlands. If you understand that the euro and the dollar are fiduciary money, it is a small effort to move the conversation towards bitcoin.
Proof-of-work
The basic value of bitcoin is in fact covered by something tangible, namely proof-of-work. The time and energy it takes to mine bitcoins guarantees a minimum price. Bitcoin is also seen as the digital gold, an alternative to economic instability.
The results of the survey show that not many people know what money really is. That is not necessarily a bad thing, not everyone has to know everything. But you can stir up the flame by talking about bitcoin. As was the case with so many, an introduction to bitcoin is an introduction to money and economics.
And hopefully, after enough people have immersed themselves in our money system through bitcoin, the survey results will be different next time.
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