Having reached record highs, Bitcoin has been making headlines as nations declare strategic stockpiles and corporate America embraces the new asset class. Why now? 

The answer lies in a pattern as old as civilization itself: When governments corrupt a currency, people innovate their way to something better.

As the saying goes, "History doesn't repeat itself, but it often rhymes." When the first coin clanked into existence in 600 B.C., it was not merely a gold and silver alloy stamped with the face of the Lydian king. It was a financial revolution. For the first time, people could move past the inefficiencies of barter and instead use a medium of exchange to trade. But this value was not in the sparkle; it was the individuals' collective understanding that these coins have worth.

The integrity of that system has waxed and waned over the ensuing millennia, typically driven by governmental spending policies. The silver-backed Roman denarii enabled the empire to flourish, but as subsequent emperors diluted its value – reducing their silver content to fund wars and build grand palaces – citizens lost faith in their currency. When Emperor Nero reduced silver content from 98% to 83% in A.D. 64, Romans began hoarding old coins and rejecting new ones. By A.D. 260, the denarius contained just 5% silver. Inflation spiraled and commerce crumbled, contributing to the eventual fall of the empire. 

The United States has battled currency crises since our nation's birth, but unlike Rome, America has consistently innovated solutions along the way. After we declared independence from Britain, the Continental Congress printed the nation's first paper money. Called "Continentals," it was backed by neither gold nor silver – simply by belief in its value. While gold and silver are at least relatively scarce metals that constrain supply, paper can be printed. And that is precisely what the first U.S. government did. 

Desperate to pay troops and buy supplies necessary to wage the Revolutionary War, Congress turned to making more Continentals. Bills flooded the market, driving down value as Americans questioned whether the new nation could honor its promises. In 1777, one patriot complained to his father as inflation spiked by an estimated 200%, writing, "America has much more to fear from the effects of large quantities of paper money than from the operations of British Generals."