The Case for a 100% Gold Dollar
Summary
Rothbard's most rigorous monograph on banking structure — the argument that fractional-reserve banking is not merely unstable but ethically equivalent to fraud. The book traces how a 100%-reserve gold standard would have prevented the cycle of banking crises that the 19th and early 20th centuries endured. The mechanism: every fractionally-reserved bank creates more claims than there is underlying gold, leaving it exposed to a coordination failure (a run) it cannot survive. Central banks were instituted to backstop this fragility — but Rothbard argues this only socialized the loss, allowing the underlying fraud to persist at larger scale. The book also handles Friedman's monetarist case for fiat with a fixed money-growth rule (Rothbard rejects: any discretionary issuer will deviate). Originally written as a journal article, it expanded into the foundational text on Austrian banking theory.
Why It Matters for Bitcoin
Bitcoin is, in essence, what Rothbard's 100% gold dollar would be if it were dematerialized. The fixed supply (no fractional issuance possible at the protocol level), the absence of any central authority that could backstop lending against unbacked claims, and the elimination of counterparty risk in custody all match Rothbard's specifications. Layer-2 systems like Lightning re-introduce some fractional-reserve dynamics in custodial implementations, and that's exactly the boundary where Rothbard's framework is most relevant for evaluating Bitcoin's evolution. The book is also a rigorous response to monetarist counter-arguments — useful for any Bitcoin advocate fielding the “Friedman's k-percent rule was good enough” objection.