The Bitcoin Standard: The Decentralized Alternative to Central Banking

by Saifedean Ammous

Under the reign of Caracalla (AD 211–217), the gold content was further reduced to 6.5 grams, and under Diocletian (AD 284–305) it was further reduced to 5.5g, before he introduced a replacement coin called the solidus, with only 4.5 grams of gold. On Diocletian's watch, the denarius only had traces of silver to cover its bronze core, and the silver would disappear quite quickly with wear and tear, ending the denarius as a silver coin. As inflationism intensified in the third and fourth centuries, with it came the misguided attempts of the emperors to hide their inflation by placing price controls on basic goods. As market forces sought to adjust prices upward in response to the debasement of the currency, price ceilings prevented these price adjustments, making it unprofitable for producers to engage in production. Economic production would come to a standstill until a new edict allowed for the liberalization of prices upward.