Roman Reher – The Fiat Lie: Why Hard Money Is the Better Choice | BTC Prague 2025 Keynote

Fiat maximalists, mainstream economists, and politicians keep telling us that centrally managed money with moderate inflation is good for all of us. At BTC Prague, I made the case — backed by hard historical data — that this is simply not true, and that hard money is the better choice for everyone except those profiting from the system.

The Fiat Narrative Is Propaganda

The standard argument goes like this: without a central authority managing money supply, prices will become unstable, the economy cannot grow, and deflation will make us all poor. Bitcoiners already know this is mostly propaganda. What they’re really defending is the Cantillon effect — the mechanism by which the state and its closest associates get richer every time new money is printed, while the rest of us pay the invisible inflation tax.

The Great Depression Was Not Caused by Deflation

The go-to argument for fiat defenders is the Great Depression of the 1920s. Yes, we saw falling prices, rising poverty and economic collapse. But if you look at the actual data, the root cause was the excessive credit expansion that preceded it — a 62% increase in the money supply. The deflation was a side effect of the bust, not the cause of the crisis. Austrian economists explained this dynamic 100 years ago with the Austrian Business Cycle Theory. As Ludwig von Mises wrote in Human Action: as soon as a depression appears, people clamor for a continuation of expansionist policy. They fight fire with fire.

A Bank for International Settlements study covering 38 countries over 140 years concluded that it is misleading to draw inferences about the cost of deflation from the Great Depression as if it were the archetypal example. There is simply no statistically significant link between falling prices and economic decline.

The Numbers Don’t Lie

Thomas Hogan, former chief economist of the US Senate Committee on Banking, published a 2021 paper asking: how good was the gold standard? The results are striking. Under the market-based gold standard from 1790 to 1913, average inflation was just 0.2%. Under the Fed-managed fiat standard since Nixon’s 1971 shock, it has averaged 4% — double the stated 2% target, and that’s before including the COVID era when one-third of all dollars ever created were printed.

On real GDP growth, the market-based gold standard delivered 4.2% annually. The Fed-managed fiat standard? Just 2.8%. Hogan’s own conclusion: the Fed has not obviously outperformed the market-based gold standard. Price levels were more predictable before the Fed existed, and financial markets have actually become more volatile since its creation.

Hard Money Drives Innovation

Fiat defenders also claim we need endless credit expansion to fund innovation. But the Industrial Revolution — mankind’s greatest leap forward — began in the second half of the 18th century, precisely when Great Britain adopted the gold standard around 1717. The second industrial revolution and Europe’s Belle Époque followed as the gold standard spread globally in the late 19th century. Ohio State University’s list of the 10 greatest inventions of the past 1,000 years — electric light, the telephone, the automobile, the radio — points overwhelmingly to the gold standard era. The technological foundations of the internet, AI, and even Bitcoin itself were built under hard money.

Bitcoin Is the Superior Hard Money

Going back to a gold standard is not realistic in a globalized digital world — gold requires storage, banks, and certificates, which historically allowed governments to suspend convertibility, print money, and fund endless wars through the inflation tax. Bitcoin solves this. It cannot be confiscated or inflated away, and it can be used directly for payments — on-chain or on layers built above it. The old free-banking era before 1913 self-regulated naturally: banks that issued more certificates than they held gold simply went bankrupt. Bitcoin recreates that discipline at a global scale