Jeff Booth is one of the more thought-provoking voices in the international Bitcoin community. A technology entrepreneur, investor and author of The Price of Tomorrow: Why Deflation is the Key to an Abundant Future, Booth approaches Bitcoin differently from many of its better-known advocates.
His starting point is not the Bitcoin price. Nor does he begin by arguing that Bitcoin is “digital gold”.
Instead, he begins with a deceptively simple observation:
Technology enables humanity to do more with less.
From this observation Booth develops an economic argument about technology, productivity, debt, inflation and ultimately Bitcoin.
Technology Should Make Things Cheaper
Consider what technological development has done to communications.
A few decades ago, communicating with somebody overseas involved expensive international telephone calls or sending physical correspondence. Today we can communicate instantaneously by email, video call or messaging at virtually no additional cost.
The same phenomenon has occurred with photography, music, maps, computing, information storage and countless other products and services.
Artificial intelligence may dramatically accelerate the process. Work that previously required many hours of human effort can increasingly be completed in a fraction of the time.
Booth argues that this is inherently deflationary.
If a company can manufacture twice as many products using half the resources, its cost per product should fall. Competition should eventually force at least part of that saving through to consumers.
In simple terms, technological progress should enable our money to buy more, rather than progressively less.
Yet our everyday experience frequently appears to be the opposite. Housing, food, education, healthcare and many other necessities tend to become more expensive over time.
Booth asks why.
Technology and Debt Are Pulling in Opposite Directions
His answer is that two enormous forces are operating simultaneously.
Technology pushes costs down.
The modern monetary and financial system tends to push nominal prices up.
Debt is central to his reasoning.
Suppose somebody owes a bank R1 million. If prices and wages fall substantially, the debt remains R1 million, but the debtor may have less income with which to repay it. The real burden of the debt has increased.
The reverse occurs with inflation. If incomes and prices rise while an old debt remains fixed in nominal terms, the real burden of that debt can diminish.
This is one reason highly indebted economies generally regard sustained deflation as dangerous.
Booth takes the argument further. He believes that the world’s financial system has become so dependent upon debt and expanding credit that it cannot comfortably accommodate the deflation that technological progress would otherwise produce.
The result, in his analysis, is a fundamental conflict:
Technology wants prices to fall, while the debt-based financial system requires sufficient nominal growth to keep the system functioning.
This conflict lies at the heart of Booth’s worldview.
The Measuring Stick Problem
Perhaps Booth’s most useful contribution is his challenge to the way we measure wealth.
Imagine owning a ruler that becomes slightly shorter every year.
You measure the same table annually and discover that it appears to become longer.
You might conclude that the table is growing.
The table, however, has not changed. The measuring instrument has changed.
Booth asks whether something similar happens when we measure assets exclusively in fiat currencies.
Consider a house purchased for R2 million and later sold for R4 million.
The owner might understandably say:
“I doubled my money.”
But suppose that, during the same period, the prices of food, vehicles, building costs and comparable houses also doubled.
Has the owner genuinely become twice as wealthy?
In nominal rand terms, yes.
In purchasing-power terms, perhaps not.
This distinction between nominal value and real purchasing power is important irrespective of one’s opinion of Bitcoin.
It also explains one of Booth’s most provocative statements: that Bitcoin is not necessarily “going up”.
Taken literally, that statement is plainly incorrect. Bitcoin rises and falls substantially when measured in dollars, rand and other currencies.
Booth’s point is different.
He asks us to consider whether part of Bitcoin’s long-term appreciation reflects deterioration in the purchasing power of the currency against which it is being measured.
Instead of asking only:
“How many rand is one Bitcoin worth?”
he encourages us eventually to ask:
“How much property, energy, food, labour or other economic value can one Bitcoin purchase?”
The denominator matters.
Where Bitcoin Enters the Picture
Booth believes Bitcoin provides an alternative monetary measuring system because its ultimate supply is governed by protocol rather than by discretionary monetary policy.
This is why he does not regard Bitcoin merely as an investment.
For Booth, Bitcoin is simultaneously:
- an asset;
- a savings technology;
- a monetary network; and
- a protocol through which value can be transferred without requiring a central monetary authority to determine its supply.
This distinction is important.
An investor may buy Bitcoin simply because he expects its rand or dollar price to increase.
Booth is interested in a much bigger question:
Could Bitcoin eventually become one of the units in which people measure economic value itself?
Whether that occurs remains uncertain. Bitcoin is still relatively young and remains highly volatile over shorter periods.
Nevertheless, Booth’s question deserves consideration.
Artificial Intelligence Makes the Question More Urgent
Artificial intelligence strengthens Booth’s argument because AI potentially accelerates productivity enormously.
Take a professional firm as an example.
A routine task that previously required five hours might eventually require one hour with appropriate AI assistance.
Multiply that productivity improvement across law, accounting, medicine, engineering, software, manufacturing, logistics and administration.
Society could potentially produce far more using substantially fewer resources.
That should create greater abundance.
But it also raises difficult questions.
What happens to employment?
What happens to wages?
What happens to heavily indebted consumers if incomes are disrupted?
How do governments fund themselves if the nature of employment changes?
Booth believes that AI will therefore accelerate the existing tension between technological deflation and a financial system dependent upon debt and nominal growth.
Bitcoin, in his view, becomes increasingly relevant as that tension intensifies.
Booth, Michael Saylor and the Financialisation of Bitcoin
An especially interesting aspect of Booth’s recent thinking concerns Michael Saylor and the institutional adoption of Bitcoin.
It would be incorrect to describe Booth as fundamentally opposed to Saylor. They agree on many important matters.
Both regard Bitcoin as an exceptionally important monetary asset. Both are concerned about long-term monetary debasement. Both believe Bitcoin has characteristics that distinguish it from conventional financial assets.
Their difference is more subtle.
Saylor has demonstrated how Bitcoin can be incorporated into the existing capital-market system. Companies can acquire Bitcoin, issue shares, raise debt and construct financial instruments around Bitcoin holdings.
Booth asks whether this may sometimes miss Bitcoin’s deeper significance.
His concern can be expressed simply:
Bitcoin may be an extraordinarily sound asset, but that does not make every financial structure built around Bitcoin sound.
A company holding Bitcoin can still fail.
A Bitcoin lender can fail.
An exchange can fail.
A custodian can fail.
A highly leveraged investment structure can fail.
Bitcoin itself does not have to fail for any of those things to happen.
The distinction is similar to gold. A gold bar cannot become insolvent. A heavily indebted company owning gold certainly can.
Bitcoin Versus a Claim on Bitcoin
This leads to an important practical distinction, particularly for lawyers and financial professionals.
When somebody says:
“I own Bitcoin,”
what does that actually mean?
The person might:
- control Bitcoin directly;
- hold Bitcoin through an exchange;
- own shares in a Bitcoin fund;
- own shares in a company holding Bitcoin;
- have a contractual entitlement against a custodian.
Economically these arrangements may all provide some exposure to Bitcoin.
Legally they are very different.
Counterparty risk differs.
Insolvency consequences differ.
Custody differs.
The ability to transact independently differs.
This is one reason Booth places considerable emphasis on self-custody and independent verification.
Bitcoin gives individuals the unusual ability to hold and transfer significant value without necessarily depending upon a traditional financial intermediary.
That ability is one of Bitcoin’s defining characteristics.
It does not, however, mean that self-custody is automatically appropriate for everyone.
Self-custody replaces institutional risk with personal responsibility. Private keys can be lost. Recovery arrangements can fail. Estate planning can be inadequate.
The correct lesson is therefore not simply “remove all Bitcoin from institutions”.
It is:
Understand precisely what you own, who controls it, what risks you carry and what happens if either you or your intermediary can no longer act.
Why This Matters for South Africans
Booth’s philosophy becomes particularly interesting when considered from a South African perspective.
South African investors already have to consider:
- inflation;
- the long-term purchasing power of the rand;
- exchange-rate risk;
- offshore diversification;
- taxation;
- regulation;
- estate planning; and
- custody.
Bitcoin introduces another monetary asset and network into that environment.
But decentralisation does not mean that Bitcoin exists outside the law.
A South African Bitcoin owner must still consider tax, succession, insolvency, matrimonial-property consequences, contractual ownership, fiduciary duties and regulatory requirements.
Self-custody also creates a particularly important estate-planning problem.
A conventional bank knows that an account exists. A deeds registry records immovable property. Companies maintain share registers.
Properly self-custodied Bitcoin may have no comparable institution capable of restoring access after the owner’s death.
If heirs do not know that the Bitcoin exists—or cannot recover the necessary credentials—the asset can effectively become inaccessible.
The very characteristic that gives Bitcoin unusual independence during the owner’s lifetime therefore creates an equally unusual succession responsibility.
Should We Accept Booth’s Thesis?
Not without qualification.
Booth’s strongest arguments deserve serious consideration.
Technology clearly increases productivity. Productivity can reduce costs. High levels of debt make sustained deflation problematic. Monetary units do change in purchasing power. And owning Bitcoin directly is fundamentally different from owning a contractual claim linked to Bitcoin.
Other aspects are more debatable.
Technology is not the only force affecting prices. Energy shortages, wars, regulation, demographics, taxation and genuine scarcity can all increase costs.
Nor has it been established that Bitcoin will inevitably become a global monetary standard.
Financial systems also have an extraordinary ability to adapt. Fiat currencies, Bitcoin, stablecoins, bank deposits and other monetary instruments may coexist for decades.
Booth’s framework should therefore be treated as a powerful analytical lens rather than an unquestionable economic law.
The Most Valuable Lesson
Booth’s greatest contribution may ultimately have little to do with predicting Bitcoin’s future price.
He forces us to examine the measuring instrument itself.
When property rises from R2 million to R4 million, did the property genuinely become twice as valuable?
When a share portfolio increases by 10%, did the investor become 10% wealthier in purchasing-power terms?
When Bitcoin rises against the rand, how much represents increasing Bitcoin adoption and how much reflects changes in the currency against which it is measured?
These are questions investors should ask regardless of whether they own Bitcoin.
Perhaps the simplest way to understand the difference between Jeff Booth and Michael Saylor is this:
Saylor’s great proposition is that Bitcoin may be the world’s superior monetary asset.
Booth’s more radical proposition is that Bitcoin may ultimately form part of a superior monetary system.
Whether history proves Booth correct remains to be seen.
But his underlying challenge is difficult to ignore:
Before deciding whether an asset is becoming more valuable, make sure that the ruler with which you are measuring it has not itself changed