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The last penny, nominally valued at $0.01, was minted by the United States Mint in Philadelphia, Pennsylvania, on Wednesday, marking the end of 232 years of new pennies being minted and circulated.
US President Donald Trump ordered the US Treasury to stop producing pennies in February, and the Treasury initially set a target of 2026 for the last mint. However, the Treasury ran out of patterns used to make the coins between June and September, according to him Axios.
A penny costs about 3.7 times its face value to manufacture, meaning that each $0.01 coin actually costs more than $0.03.
While it is no longer economically feasible to mint more US cents, the coin will remain legal tender, with more than 250 billion physical cents continuing to circulate.
“Inflation has made the penny useless. Meanwhile, it makes the session more relevant every year,” Alexander Leishman, CEO of the financial services company Bitcoin River, he saidrefer to the subunit of a Bitcoin (BTC).
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Bitcoin as a solution to the erosion of the value of fiat money
Bitcoin was created as an alternative monetary system that has a supply cap of 21 million coinsmeaning that as the demand for BTC increases, so does the price per coin.
Technological development is a deflationary force that makes the production process more efficient and reduces the price of goods and services over time, according to to the author, economist and lawyer BTC Saifedean Ammous.
Fiat currencies, in contrast, fail to capture this price deflation because their supply is constantly increasing, resulting in reduced purchasing power over time, which is reflected in higher prices of goods, assets and services.
In other words, the price of goods and services is not increasing; the value of fiat currencies is decreasing relative to goods, services and hard assets, according to Ammous.
If these same goods, services and assets were denominated in BTC or some other hard money standard, the prices would go down over time, the economist argues.
The US dollar has lost over 92% of its value since the creation of the Federal Reserve Banking System in 1913, according to to the precious metals dealer The Gold Bureau.
Meanwhile, Bitcoin reached all-time highs above $126,000 in October as the US dollar tracked its the worst year since 1973according to market analysts at The Kobeissi Letter.
“The USD has lost about 40% of its purchasing power since 2000,” the Kobeissi Letter. he said in October, adding that it has lost more than 10% of its value year to date since October.
However, economist Paul Krugman, who has long been critical of cryptocurrencies and BTC, he said the power of the dollar rests in how easy it is to use, compared to BTC, which is difficult for the average person to maintain and transact with.
“The whole point of the dollar is that it’s really easy to use, and Bitcoin is not easy to use,” Krugman told podcast host Hasan Minhaj.
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