Milton Friedman Predicts Bitcoin
Nobel laureate Milton Friedman explicitly predicts the rise of 'reliable e-cash' that allows peer-to-peer transfer without the state.
On May 1, 1999, in an interview with the National Taxpayers Union (NTU), Nobel Prize-winning economist Milton Friedman made one of the most prescient predictions in the history of technology. When asked about the future of the internet, Friedman stated: "The one thing that's missing, but that will soon be developed, is a reliable e-cash, a method by which on the Internet you can transfer funds from A to B without A knowing B or B knowing A."
Friedman likened this future system to handing over a $20 bill in person—a bearer instrument where there is no record of where it came from. He argued that the internet would be a major force for reducing the power of government, specifically by making it difficult to collect taxes on services. However, he also warned of the "negative side," predicting that such a currency would be used by "gangsters" and for illegal transactions—a prophecy fulfilled by the Silk Road just 12 years later.
This quote is foundational to the ethos of Bitcoin because it connects the technology directly to the Chicago School of Economics and the libertarian ideal of non-state money. Friedman died in 2006, just two years before the Bitcoin whitepaper was published, so he never saw his prediction realized. Friedman's specific description of a permissionless, private, peer-to-peer transfer method provided the economic and moral validation for Bitcoin, framing it not as a new tech toy, but as a necessary tool for preserving individual liberty in the digital age.
Key Sources:
• National Taxpayers Union: 1999 Interview Transcript
• YouTube: Video of the Prediction
• CoinDesk: Milton Friedman Predicted Bitcoin