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The Bitcoin Standard Podcast
338. How Gold Could Have Gone Global - The Gold Standard Audiobook, Chapter 9
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Saifedean Ammous
Foreign.
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Narrator
Principles of Economics. My complete guide to Understanding Economics is now available in hardcover, audiobook and ebook from seifeddin.com, amazon and many more booksellers worldwide. And now I am also teaching a course based on this book on my website seyfeddin.com Principles of Economics will run the whole academic year from September to June and will have a new lecture every two weeks as well as weekly live online discussion seminars open to learners from all over the world and from all walks of life. Whether you're a student, a professional, or a retiree, you are making economic decisions every day and this course will arm you with the wisdom of centuries of economists to improve your economic decision making. You'll also get a free book of Principles of Economics if you sign up for the course. Go to safedin.com and sign up now. Welcome to the Bitcoin Standard Podcast. For today's episode, I'm doing something a little different. I'm releasing Chapter nine of the audiobook of my latest book, the Gold Standard. The book asks a simple counterfactual question. What might the 20th century have looked like if the world had remained on hard money instead of abandoning gold for government Fiat Currencies? Chapter 9 is called Bleriot Transport Corporation. It looks at how a functioning international gold standard might have evolved alongside advances in aviation, transport and communications, and how entrepreneurs could have solved one of gold's biggest historical moving large amounts of value quickly across long distances without having to surrender control to banks and governments. The chapter develops some themes that will be very familiar to custody settlement, monetary sovereignty, and the importance of technological innovation in making hard money more useful. I hope you enjoy it. If you would like to listen to the complete audiobook of the Gold Standard, you can get it now on Audible or on my website seyfeddin.com and if you want to get the physical book or e book, you can also get them from Amazon.com and seyfed deen.com and now here is chapter nine of the Gold standard, Bleriot Transport Corporation the Right Move in Another World the Wright's lawfare may have crippled aviation, but fortunately for our world, aviation was emancipated. The pivotal turning point came in October 1910 when Octav Chanute decided to write a detailed letter to the Wright brothers explaining his misgivings in detail and sharing his honest thoughts on how best to move forward.
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Saifedean Ammous
Dear Wilbur and Orville, I hope this letter finds you well. I have received with annoyance the news that you are in court again, this time hoping to stop French engineers from copying your aircraft design. As I have told you before, I find it utterly distasteful, crass, self destructive and impudent for engineers to try to use the strong arm of the law to prevent others from emulating their achievements. No man has ever built anything without relying on the efforts of many men before him. It was I who came up with the idea of using the strip wire braced wing structure. You took that idea from me, and yet it never crossed my mind to attempt to take you to court. On the contrary, I went down to Kitty Hawk and did everything I could to help you implement the design as efficiently as possible in the hope that you might achieve flight. It was not your idea to combine a rotating propeller with wings to achieve lift off. Alphonse Penaud came up with that idea. And it was a toy with this design of his, gifted by your father to you as children, which sparked your entire interest in flight. It was not your imagination that invented the gliders you used. That was the work of Lilienthal, who never considered suing you for copying. Was not you who invented the engine that drives the propeller, or the fuel that runs it, or the metals and fabrics needed to make an airplane work. You took a momentous step forward by being the first to achieve controlled flight. But it was merely one step in humanity's long march. A step that would not have been possible without the infinite steps that preceded it. All the way from the command of fire until my strut wire braced wings. And it is a march that will surely continue with more engineers and inventors improving upon what you and I built in ways we cannot imagine. You could not have made your step without those who preceded you. So you should not use the law to ban those who follow you from taking more steps. Such a move not only fails on a moral basis, but I also firmly believe it fails the market test. In the long run, you will be able to build better, faster and safer airplanes if you let people make on your ideas than if you hamper them. The world has many more engineers than you. And even if you were the smartest of them all, you would not be able to come up with a tiny fraction of the ideas that the rest of the world's engineers can come up with. Letting the world use your ideas means many potential improvements to your ideas which you yourself can benefit from. And it will mean you can use the many ideas of others. In the spirit of scientific cooperation and our shared desire for human progress, you should set the example for the industry to encourage the free exchange of ideas as a courtesy for all the help others have been to you, I implore you to drop all your court cases and get back to your workshop. You are engineers and builders, and engineers belong in workshops, not in courtrooms with criminals and lawyers. The world will benefit immensely more from what you produce in workshops than what you do in courtrooms. Your ingenuity, place in history, and first mover advantage are unassailable and you can channel these toward building better airplanes, benefiting from the improvements others make to airplanes to offer the world the best airplanes. There are infinite opportunities for bringing flight to various fields of human commerce, and I hope you make the most of them. There are millions worldwide who travel long distances by boat, train, car or foot and would pay dearly to fly instead. Countless merchants would pay to have their goods delivered by plane. Countless banks would pay for same day final settlement rather than wait on central bank clearing. You will not capitalize on this demand by taking others to court. If you continue to try to use the courts to bludgeon other inventors, you will stymie human progress while sinking into irrelevant bitterness. I have spoken to Dumont, Bleriot and all the major French aviators and obtained their solemn promise that they will never sue you for patent infringement if you stop this lawsuit. I believe a new cooperative way is possible for our industry, for my sake, for your sake, and for the sake of humanity. Get back to your workshop. Sincerely, Octave Chanute 10 February 1910 Orville
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Narrator
Wright put the paper down and stared blankly at his brother. Wilbur Chanute had struck a nerve, and it was the most sensitive nerve of all. Wilbur and Orville had barely spent any time in their workshop over the past year. The patent court cases had consumed and hollowed them. As men, inventors, businessmen, and engineers, they hadn't made any improvements to their airplane models in that whole year. All while reports were flooding in about pilots and engineers achieving seemingly impossible feats and creating all manner of improvements that seemed unworkable to them. Aviators were making progress faster than the Wright's lawyers could sue them. The Wright brothers had a powerful desire to attempt several of the designs they had heard of and many ideas for how to improve improve upon them. But that was not possible because their days were spent with lawyers trying to get the state to sanction anyone building airplanes for violating their patent. Rather than continue pushing the boundaries of what humans were capable of, the brothers now found themselves pushing back human progress in the hope they could get the state to help them squeeze a few more dimes from their competitors. The youthful excitement and boyish mechanical Curiosity the two brothers once possessed had taken them from a bike repair shop to making history as the first humans to fly. But that seemed like ages ago. They missed the thrill they got from camping for weeks in Kitty Hawk. They felt like they had aged three decades in the five years since their first flight. Worse, they'd become the smug and self entitled conservative figures of authority they had always detested, the type who could never build anything but derived all pleasure from preventing others from building. Their days were spent meeting lawyers, writing letters, and hiring private investigators to spy on their competition. They missed the stubborn stains of engine lubricant oil on their hands, the deafening symphony of roaring engines, the sweet aroma of burned gasoline, and the sight of each other exhausted and falling asleep on the workshop floor at the end of a long night of work. They missed the loud, foul mouths of their shop helpers, and they couldn't stand their lawyers endless monotone droning. I do miss that workshop, wilbur said wistfully after a long silence. I really miss not knowing lawyers. In retrospect, the days I spent outside of the legal system were the highlight of my life. I wish we could keep those court cases going while we get back to the workshop to make better planes. I wish so too, responded Orville. But lawyers are very expensive and dangerous, and if you're not on top of them, they could cost you very dearly. I admit I have asked myself this question before, and today Chanute has brought it up again. Why should we even care that others are copying us? Let them build their own airplanes. We will make better airplanes. There is far more demand for airplanes than our workshop could possibly meet. We invented the airplane, and they will always have to catch up to us if we focus on pushing ourselves and making our planes better. Why do we want to stop them from innovating? Because if they copy our design and make a better airplane, they'll make more money than us, orville responded. Wilbur replied, the planet has a billion and a half people on it, but it doesn't have 100 working airplanes. Are we really so insane as to imagine we would become the only authority allowed to produce airplanes through government fiat? There will be infinite demand for airplanes, and the more time we spend in courts, the less time we'll spend in the workshop capitalizing on our advantage, and the more we are allowing others to overtake us. Inevitably, Orville had no answer to his brother. He put away the papers on his desk and started packing to go home. Wilbur soon followed. The next morning, Wilbur woke up and decided to forego his office suit and Instead opt for his old workshop overalls. He drove to the workshop and was unsurprised to find Orville already there, also in his overalls. It had been months since they were last in the workshop together, though it felt like just yesterday. They slipped back into their old routine, picking up all the loose ends and unfinished tasks they had been neglecting for months. In their natural habitat, the brothers didn't even need to talk to communicate effectively, whereas in the office they struggle to express simple ideas to one another. Lions roar, birds chirp, wolves howl, and lawyers talk. But engineers build. The native language of an engineer is his product. Descriptions and explanations all seem futile next to a working product of the human mind that demonstrates what was thought impossible before. And perhaps never in the history of humanity had an inventor produced an object that spoke louder than an airplane. The dream of humanity for eons of observing birds, the dream that had killed countless dreamers, finally achieved. Around noon, their office assistant arrived at the workshop. He was puzzled as to why neither of them had shown up. The lawyer had been waiting for them to attend their planned meeting, but they both seemed unconcerned. They told the assistant to inform the lawyer that they wouldn't be able to make it to the office and that he'd be welcome to see them in the workshop. Their lawyer arrived later that afternoon, and the brothers informed him that they were no longer interested in pursuing their court cases. They settled his bill and immediately felt rejuvenated, like old men given their younger bodies. Again, they were no longer terrified of the prospect of someone building something better than their planes. They were now excited about what they could build themselves. The Wrights abandoning their lawsuit was huge news for the intrepid pilots, mechanics and entrepreneurs involved in the nascent aviation industry, particularly in France. Legal battles between the Wrights and their numerous competitors had dominated the period from 1907 to 1910. When news of the lawsuit's termination reached France, the excitement was palpable. Plain builders were now free to tinker with their designs. Investors could finance the builders without worrying about being ruined by lawsuits. Entrepreneurial imaginations would run wild with airplane based business ideas. Nobody was happier with the news than Louis Bleriot. The rights lawsuit had hampered his progress and soured his typically jovial mood. So its dropping put a spring in his step and a sparkle in his eye. He went home every day, excited to share his ideas with his wife, like a child telling his mom about his school day. He knew airplanes would be a huge deal, but his success with headlights made him keenly aware that airplanes could not succeed unless there was serious market demand driving their development. While other aviation pioneers focused on technical improvements and exhibitions, Bleriot knew the best way to spur innovation and improvements would be to stimulate serious market demand for a product. His crossing of the English Channel had increased demand among a few wealthy adventurers, But a real commercial application was needed. He had considered building aircraft for travel or joyrides, allowing people to see the world from above for the first time. He considered building airplanes optimized for moving commercial cargo or mail. He meticulously ran the numbers on these ideas, but they proved not to be financially viable. Humans were too heavy for this to work. The cost of manufacturing airplanes for passengers would be very high, and the cost of each ride would likely deter most of those who are not already deterred by safety concerns. He looked at commercial goods. But most goods, like humans, were too heavy to move economically over airplanes. He realized that this idea would only work for goods that held a lot of value and little weight. This simple thought sent him down a rabbit hole that would change the world forever. The rights lawsuit demise encouraged many people to enter the world of aviation. Many of France's entrepreneurs and adventurers were hard at work trying to improve on their airplane design. To stimulate more innovation, Guy de Polignac established the Pomeric cup in 1909 to offer a lucrative prize for the pilot who could fly the longest distance. On March 28, 1911, Jules Verdin managed a 560 kilometer flight from Paris to Bordeaux. The next month, he collected the inaugural Pomerick cup at an event hosting Europe's top pilots and aviation engineers. Now for a quick word from our sponsors. With fiat money constantly debasing, preserving your wealth isn't an option or luxury. It's a financial and moral imperative. If you're familiar with my work, you know the only financial advice I ever give is to buy and hold Bitcoin for the long term. This has never failed anyone. If you want to buy Bitcoin, I strongly recommend using Swann, a group of hardcore core bitcoiners laser focused on making Bitcoin easily accessible. While most scramble to react to each new crisis, Swan Private clients are already positioned in the only monetary asset with absolute scarcity, Bitcoin. Swan Private partners with families and institutions who share a principled conviction in bitcoin as the foundation for multi generational wealth. With concierge service, deep expertise and uncompromising security, the Swan team helps clients exit the crumbling fiat system and secure their future in sound money. Today, Swan Private serves more than 5,000 high net worth clients who have purchased more than $4.5 billion of Bitcoin and put it into cold storage. If you're ready to move beyond the false promises of Fiat, start your long term bitcoin strategy@swann.com safe s aif. Not your vault, not your gold Bleriot was there on a mission. Aviators had come a long way since his flight across the channel, and so had he. But he was no longer interested in competitions, trophies, publicity or media. He meant business, and he knew business would be what would catapult flight, not adventures or trophies. During the ceremony, Bleriot spoke to each of the seven pilots present and informed them that he wished to meet with them regarding an important matter after the ceremony. Given his wealth and his stature in the aviation industry, not a single one of them missed the meeting. Jules Verdin, Roland Garou, Henry Farman, Rene Bedel, Pierre Dacour, Maurice Guyot, Marcel Brindillon, de Moulinet and the Germans Bruno Langer and Karl Ingold all attended. After they all sat down, Bleriot launched into a speech they did not expect.
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Saifedean Ammous
Thank you all for staying here and joining me. Congratulations to Jules and hard luck to the rest. I wanted to meet with you because I have a serious proposition for your consideration. I have been thinking rigorously about how to improve aviation, and I've concluded that the only thing that will really make a significant impact is finding substantial commercial demand for aircraft. While I appreciate the excellent efforts of the Pommeray Group organizers and I realize that it provides an incentive for improving aircraft, it cannot compete with commercial applications in spurring innovation. When someone finds a way to make money from airplanes, a giant pot of gold will be available to everyone who improves them, as it will lead to higher productivity and better margins. It will dwarf anything you can win in a competition like this. It is one thing to build things for fun. It is an entirely different thing to build something for capitalists to use in production. The latter will scale much faster and will work more efficiently and safely.
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Narrator
The pilots looked at each other with bewilderment as Bleriot's eyes lit up and
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Saifedean Ammous
he continued, my proposition to you is that instead of being amateur adventurers, let's utilize our talents to become successful entrepreneurs, making the world a better place. Instead of competing for trophies like children, let us all build something that will secure our children's financial future along with that of their children. I have thought long and hard about the killer app of flight, and at this point I believe it is in the transportation of gold. For the foreseeable future. Gold is the only thing valuable enough to pay for its weight in an airplane. There is also demand for fast final settlement of gold. The train and the car have moved goods very quickly and banks cannot keep up. Rather than settling with one another directly, banks now rely on central banks to clear and settle payments between them. This is highly time consuming and creates problems for business, as we all saw recently. Remember the massive bank failures in 1907 in the United States? Many successful businessmen were ruined through no fault of their own just because the banks they used were engaging in credit shenanigans.
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Narrator
Bleriot pulled out a gold coin from his pocket and flicked it in the air, catching it again with relish.
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Saifedean Ammous
This, however, never fails. Gold never lies, and we're the only ones who can move it as fast as its owners need it. Holding your own gold in your own hand frees you from having to trust bankers or spending half your working hours auditing and researching their business. Henry Ford's empire was built on a giant cash balance held in the company headquarters. And he's never lost a moment of sleep worrying about a shady banker. That's why his motor company began its most astounding growth period right after the 1907 banking crash, when many of the companies relying on banks went out of business. I've been working on this problem for the past four years and have the perfect business idea to free ourselves from this. The root problem with conventional banking is all the trust that is required to make it work. The central bank must be trusted not to debase the currency, but the history of central banks is full of breaches of that trust. Banks must be trusted to hold our money and transfer it, but they lend it out in waves of credit bubbles with barely a fraction in reserve. You must remember that if it is not your vault, then it is not your gold. You only own a promise from the vault owner that he will grant you gold if you ask for it. This does not inspire confidence. As an engineer, I need certainty. And I am growing increasingly wary of entrusting my wealth to institutions that are acquiring increasing power over me. I am developing a new peer to peer gold clearance system. Reliant on airplanes. It's decentralized with no central bank because everything is based on fast clearance. We are going to build a fleet of the world's fastest and most reliable aircraft, piloted by the world's best pilots. And we will create a peer to peer gold clearance network that enables banks, corporations and individuals to trade gold directly with one another without the need for central banks. Our clients will sleep easily knowing they control their own gold and do not have to trust shady central banks to refrain from engaging in risky financial shenanigans. We will propel aviation forward and upward to unimaginable heights. With the revenue we generate. We will build planes that cross the Atlantic. We will make airplanes so abundant that that even the poor will be able to afford them. I want you to look at what Henry Ford did with the car industry and imagine this in aviation. He developed the Model T, and when it generated substantial revenue, he reinvested in capital goods to make production more efficient and cost effective, enabling him to meet the demand of an ever increasing customer base. We are on the cusp of an explosion of automobiles, thanks to Ford's genius. By making the car commercially viable, Ford increased demand for cars infinitely. I want to do the same for airplanes and I need you to help me. And I intend to make it worth your time. Our airplanes will be ready to take off from anywhere and land anywhere. We will fly in pairs of aircraft to ensure we have backup in case something goes wrong with one of them. I will require you to be fully dedicated to this job. No more competitions and acrobatics. No more stunts and showboating. It's time to get serious. You will get an equity stake in the company as well as a steady monthly income of 500 francs each. You have one week to provide me with your final answer. I am now happy to take any questions.
- [25:54]
Narrator
Now for a quick word from our sponsors. The Bitcoin Standard Podcast is brought to you by the safehouse.com, my independent publisher and bookshop, selling the best bitcoin books in high quality cloth hardcovers built to last for generations. Most books these days are pretty fiat. They're flimsy and they fall apart quickly. And I did not want that for my books. So I set up the Safe House especially to provide you with beautiful, long lasting classic cloth hardcovers you can proudly pass down for generations. You can get copies of my three books, the Bitcoin Standard, the Fiat Standard, and Principles of Economics. And you can also get copies of Lyn Alden's Broken Money, Parker Lewis Gradually Then Suddenly, and Matthew Lisiak's Fiat Food, to which I contributed a few chapters. We now offer bulk discounts so you can buy books for yourself and for the friends and family you'd like to learn about bitcoin. Buy any two books for $50, any five books or more for $20 per book. And for more than 50 books, it's only $15 per book. Go to the safe house.com thes aif house.com where you can get all of these books in high quality cloth hard covers delivered worldwide and get 10% off for paying with Bitcoin. This podcast is also brought to you by the Bitcoin Way, your professional Bitcoin IT team offering you personalized, secure and comprehensive solutions for every step along your Bitcoin journey. The Bitcoin Way offer live concierge service to guide you with your Bitcoin cold storage, running your node, privacy best practices, inheritance planning, corporate strategy and multisig solutions. They don't touch your coins. They guide you through the process of acquiring your coins and securing them. If you'd like to make your setup safer and more reliable, book a consult with them and see what they have to suggest. If you want to give someone the gift of Bitcoin, get them this professional service that will ensure they start off knowing exactly how to manage their coins and not lose them. Go to thebitcoinway.com and start bitcoining more confidently. The pilots were stunned by Bleriot's audacity. They had all thought of themselves as daring and brave for being some of the first pilots, but this was a whole other level of bravery. It made their aviation feats look like child's play. Verdiz was the first to break the awkward silence. Quote Louis, I've crashed twice this year. You want me to fly with gold worth more than my house? What happens when we go down in a storm over the Alps or when the engine cuts off mid channel? Added Dakur, I've had three engine failures this month alone. Gold doesn't float. Bleriot's face hardened.
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Saifedean Ammous
You are flying toys for trophies. You tinker with these toys with your peasant cousins and hope for the best. If you join us, you will be flying professional planes built by engineers for professional performance. Everything will be optimized. I've made headlamps that work in the worst conditions because their commercial viability lets me secure significant capital for them. I've flown the channel when everyone said it was impossible. Do you think I'd stake my fortune on unreliable amateur machines? We will be professional and will fly in pairs, always pairs. Backup pilots, backup engines, backup everything.
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Narrator
After a long silence, Farman said, there is no way they would let us do this. These central banks are not going to allow competition.
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Saifedean Ammous
Central banks work just fine for the central banks and their owners, and they cannot even conceive why others might want to use something different. They are too old, decrepit and comfortable even to imagine what airplanes will accomplish. But even if they can understand it, they how can they stop us? We will not be dealing with them in any way, so we don't need them for anything. Our planes can take off from any empty field and land in any empty field around the globe. By the time they see our planes, we will be out of the range of their guns. Nobody has ever managed to shoot down an airplane and it'll be a long time before anyone can figure out how to do it. They don't have an infinite money printer to fund a police state to go after us. The only thing they can do is cry harder.
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Narrator
What if they criminalize financial settlement outside of banks? Asked Ingold.
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Saifedean Ammous
That is incoherent. Doing so would criminalise you paying in cash at your local cafe. Trading physical gold is no different from any other form of trade. Airplanes carrying gold are no different from any form of transportation carrying goods. It would have to be some absurdly totalitarian government that would specifically try to criminalize the use of jets for transferring gold. They'd have to have a literal money printer to fund something like this. But they don't. They are still on a gold standard and only have a small margin for inflation. By the time they understand what is going on and the ramifications and then try to enforce any kind of ban on us, we will likely have already made a fortune and built a giant fleet. We will have major industrialists and financiers using our services and they will advocate for our protection. With the central banks undermined, these governments won't have much financing to enforce such totalitarianism. And if they do? Well, it's better to be rich asking for forgiveness than to be poor asking for permission.
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Narrator
I'm not convinced this is too risky and stressful, said Gilax, his patience wearing thin. Bleriot responded quote Flying is risky and stressful and you're doing it for trinkets and attention from women. I'm offering you the chance to fly for something meaningful, something that will change the world. Bleriot's voice dropped to almost a whisper. Quote Gentlemen, the banks nearly collapsed the world four years ago. They'll do it again and worse next time. We have the power to build something independent, something they can't control or destroy. His fist clenched quote we can make men truly free with their own money. Isn't that worth more than any trophy? You're not going to make anything except a wasted fortune, replied Guilax. Quote if you don't believe me or don't get it, I don't have Time to convince you. Sorry, I'm happy with my trophies, trinkets and women. I'm out. Quote. Have fun staying poor, said Bleriot. The rest of the pilots were far more intrigued and interested. Within a week, they had all confirmed their participation to Bleriot. As the pilots left the meeting in the Paris evening, a letter from Bleriot arrived at the Wrights brothers workshop in the Dayton afternoon. This letter explained Bleriot's idea to them and asked for their cooperation. Bleriot offered to come to the United States to meet the brothers and discuss it in more detail. The brothers were surprised by the letter, but they gave it serious thought. They knew Bleriot had the capital to attempt something this audacious and accepting his proposal would give them the resources necessary to expand their workshop and produce at scale. This was far preferable to courtroom battles over intellectual property. The offer seemed too good to be true. The pilots had always engineered but hated the business side of it. Their foray into attempting financial success through patents and licensing had been a stressful ordeal, and Wilbur's health had begun to suffer as a result of the travel. They had been back in their workshop for six months, back to work on improving their Model B, and felt reinvigorated, especially Wilbur. Now they had one of France's wealthiest men ready to bankroll them and allow them to work with their hands all day and not worry about investors, patents, lawyers and courtrooms. They telegraphed Bleriot to signal their interest and invite him to visit, then spent the next two months thinking about how to develop their aircraft Lightning. Bleriot arrived in Dayton in May of 1911 and stayed with the rites. The lawsuit nastiness had subsided, and instead a cordial spirit of cooperation existed between the men. Chanute was right. There was far more to be gained from cooperation in conquering the skies than from legal battles. Bleriot had shipped a Bleriot 11 aircraft with him, and the three men spent three weeks going over every last detail of it and the Wright's airplanes. Bleriot was amazed by the scientific experimentation method the Wrights deployed in everything. It was also quite useful that they'd spent years studying their competitors so closely, as it meant they were familiar with all the developments in the US aviation industry. The Wrights enjoyed the depth of knowledge and entrepreneurial instinct Bleriot had developed in the automobile and aviation industries. European aviation, French in particular, had overtaken American aviation in the past year or two, thanks to the rights lawsuit's more substantial crippling effect on US Aviators. There were far more airplane makers in Europe, and they had exchanged knowledge and experience more freely. That gave Bleriot a large vocabulary of improvements and solutions to potential problems. He could think of every detail, both from the angle of its engineering suitability and its potential commercial success. With their familiarity with innovation on both sides of the Atlantic and their technical genius, the three men set about on the mission of making man truly free. By the end of their three weeks together, Bleriot and the Wrights produced a working prototype of Lightning, the most technically advanced airplane in the world. On 1 June 1911, it flew its maiden flight in Ohio. With Bleriot at the helm. It could reach a speed of 280 km per hour, and it possessed a range of 1400 km. With the capacity to carry two pilots and 100 kg of load. It was a technical miracle made possible by the harvesting of the best ideas in aviation from around the world. After successfully flying Lightning, Bleriot and the Wrights agreed to start a new joint venture, Bleriot Transport Corporation, which would build lightning jets and deploy them in the clearance of gold. Bleriot would own 51% of the company's stock, the Wright brothers would own 25%, and the remaining 24% would be divided equally among 24 pilots recruited from across the United States and Europe. The Wrights immediately began work on building a factory in Daytona, and Bleriot returned to Paris, where he also built one. The factories would produce four jets each in 1911 and a further eight jets in 1912. On January 9, 1912, the first BTC transaction took place when a Lightning jet carried 8 bars of 400 ounce gold between a bank in Paris and a bank in Lyon. The following week, America's first BTC transaction took place when a lightning jet took off from the headquarters of the Standard Oil of New Jersey and landed in Cleveland, where it delivered eight bars of gold to the Standard Oil Company of Ohio. There was little fanfare around BTC at its launch. Outside of aviation circles, the idea seemed completely unworkable. Why would anyone pay for the expensive transportation of physical gold when their local bank could transfer credit obligations? To the extent that academic, governmental, banking or media authority discussed btc, it was to dismiss it with ignorant and snarky haughtiness. Central bankers, from their perch atop the universe, could not possibly see BTC as a threat to their business. So what if a few people had cleared payments directly without going through their central bank? Clearly, such a system would not scale to make a dent in the central bank's business. Skeptics mocked the use of such brilliant machinery and so much fuel for the arcane and ultimately superfluous economic task of moving sterile bars and coins of gold. Money and banking were inextricably intertwined with the state, experts said, and central banks would continue to be relied upon to ensure the safety of banks and the soundness of money. Central banks worked fine, and their proponents argued they were responsible for ameliorating the financial crises caused by greedy bankers. They relentlessly mocked BTC and its supporters for needing and wanting economic catastrophe to succeed, and they repeatedly reassured themselves that no such catastrophe was possible. Quote There simply aren't enough paranoid cranks to pay for Bleriot's fuel, wrote one Financial Times columnist, predicting an inevitable demise of the scheme. The New York Times, on the other hand, dedicated several articles to bemoaning what it saw as an unconscionable waste of fuel for no reason. Hydrocarbon fuels are only just beginning to revolutionize industrial processes and transportation, and it would be a shame if so much of these fuels were to be wasted on the paranoid fantasies of aviation enthusiasts rather than more socially beneficial uses. But business was surprisingly brisk for the Bleriot Transport Company, and the number of flights continued to rise steadily. By the end of 1913, its 12 aircraft flew around 3,000 kilometers every day by delivering gold across Europe and the U.S. their main clients initially were entrepreneurs and industrialists who moved gold within their business or traded it with other businesses. These companies appreciated not having to rely on banks, saving time and mitigating risk. Bleriot's first big customer was Henry Ford and his eponymous motor company. The man who built the industrial society around the automobile was famous for his love of cold, hard gold, cash and distrust of banks and credit. Ford famously accumulated a large cash balance from sales, stored it in his office and and used it to finance operations, bucking the trend among increasingly financialized entrepreneurs of the time who were reliant on credit to keep their business going and to expand. He constantly spurned bankers, tempting him to borrow to finance his operation, and befuddled them by continuing to grow his business worldwide without their services. Ford loved BTC and used it regularly, commissioning several flights every week. The Standard Oil offshoots were also early customers. Standard Oil had been broken up into 34 companies in 1911, and these came to rely on BTC for their transactions. Increasingly, the companies had oil fields, refineries, and offices across the United States and Canada and immediately saw the value in being able to move their money between their businesses without having to rely on Expensive, slow and unreliable banks. The panic of 1907 had left the very conservative John D. Rockefeller paranoid about leaving his wealth in banks or relying on them for his transactions. He had always liked to keep substantive cash on hand to protect against crises and to capitalize on emerging opportunities. Yet amidst the panic of 1907, he found himself worried about the fate of the banks he dealt with. Worse, he had to work with his arch rival, JP Morgan, to bail out so many bankrupt businesses and banks with loans. Quote, they always come to Uncle John when there's trouble, is how he wistfully described the episode. However, aside from the bragging rights, he did not enjoy the ordeal. He wanted his wealth to be independent of the increasingly risky banking system. So he invested in building his own gold vaults across the country and used BTC to move his money between them. Several banks relied on BTC to offer their clients faster money transfers between major cities such as Paris and London or New York and Boston. These banks could offer quicker clearance and speedier access to liquidity, which was a particularly popular option for many of the growing number of smaller banks popping up all over the United States. Banks, corporations, royals and central banks outside of Europe and the US Proved to be excellent customers paying top prices for BTC transactions. After all, BTC was more reliable than the bank of England or the bank of France, and it allowed its customers to keep their gold on hand rather than ship it halfway around the world. By the spring of 1914, BTC jets had reached Mexico, Eastern Europe, North Africa, Arabia, Persia, and even India, China and South America. In 1913, BTC doubled its fleet by producing 12 jets on each side of the Atlantic. In 1914, demand was so high that Bleriot ordered the production of 48 aircraft, increasing the fleet to 96 by the end of the year. In June 1914, a BTC Lightning made the first airplane journey across the Atlantic, flying from London to New York via Edinburgh, Reykjavik in Iceland, Narsarsuak in Greenland and St. John's Newfoundland. The start of the Great War in late July 1914 was a boon for business. Individuals. Companies and banks had started to fear for their money in the central banks. They now recognized the value of an apolitical medium for transferring value across cross international borders. The world's richest all wanted to extricate their wealth from the grip of central banks, consuming it to finance carnage. Bleriot realized this was an excellent opportunity to solve a real problem for the market while simultaneously funding the expansion of jet production. He ordered another 48 aircraft into production with their deployment expected in August 1915. What seemed like paranoia on the part of Bleriot in 1911 was now revealed as genius foresight. He had studied history and economics. He knew how financial promises can be broken in the most catastrophic ways and that people eventually learned the value of verifying rather than trusting and of holding their own money rather than holding promises. Many had doubted him, but he now stood on the verge of securing an enormous fortune, helping countless people secure their wealth, and changing the course of history. That was chapter nine of the Gold Standard. If you enjoyed this chapter and would like to hear the rest of the book, you can get the complete audiobook on Audible or from my website seyfeddeen.com youm can also get the hardcover, paperback and ebook from Amazon.com or seifedeen.com if you found this episode interesting, please share it with someone who might enjoy it and subscribe to the Bitcoin Standard podcast for future episodes and more chapters from my books. Thank you for listening.