The Bitcoin Standard: The Decentralized Alternative to Central Banking

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Any industry in which people complain about their asshole boss is likely part of the bezzle, because bosses can only really afford to be assholes in the economic fake reality of the bezzle.

People are allowed to have ideologies, but it shows good faith to be explicit that this is what is being discussed: this is political ideology, not economic or monetary theory per se. The miners have to abide by the network consensus rules to receive compensation for the resources they spend on proof‐of‐work. Government intervention is always derided as ‘unsound money’; ‘sound money’ is promoted as the solution to all the world’s ills, even ending war.The book’s 10 chapters are essentially in three parts: the first three chapters outline a particular theory and history of money; the next four intermix between a history of the gold standard and post-gold standard era, politics, and a kind of cultural anthropology of the impact of ‘sound money’ and time preference on society; the final three chapters are a more mundane description of the digital money vision of ‘ Bitcoin. A common characteristic of forms of money throughout history is the presence of some mechanism to restrain the production of new units of the good to maintain the value of the existing units. With the simple suspension of gold redeemability, governments’ war efforts were no longer limited to the money that they had in their own treasuries, but extended virtually to the entire wealth of the population. Like gold-backed money, Bitcoin has a fixed supply— there will never be more than the 21 million in existence. Contrary to the most egregiously erroneous and central tenet of the state theory of money, it was not the government that decreed gold as money; rather, it is only by holding gold that governments could get their money to be accepted at all.

Saifedean teaches courses on the economics of bitcoin, and economics in the Austrian school tradition, on his online learning platform Saifedean. Saving and investing for the long run are the key to capital accumulation and the advance of human civilization. Technology is by its nature both a non‐excludable good (meaning that once one person invents something, all others can copy it and benefit from it) and a non‐rival good (meaning that a person benefiting from an invention does not reduce the utility that accrues to others who use it). First, there is the lack of coincidence in scales: what you want may not be equal in value to what you have and dividing one of them into smaller units may not be practical. Bitcoin has a huge advantage over gold in transactions: clearance does not require a specific custodian.Making the meter shorter might make someone whose house’s area is 200 square meters believe it is actually 400 square meters, but it would still be the same house.

Further, a unit of account is essential for all forms of economic calculation and planning, and unsound money makes economic calculation unreliable and is the root cause of economic recessions and crises. Even then, though, bitcoin has the potential to give us the framework for a new sound-money policy like we had in the past, ushering a new era of economic stability.Bitcoin’s volatility derives from the fact that its supply is utterly inflexible and not responsive to demand changes, because it is programmed to grow at a predetermined rate. delay his gratification to engage in risky production over a longer period of time is that these longer processes will generate more output and superior goods. Compellingly, Ammous shows that it is no coincidence that the loftiest achievements of humanity have come in societies enjoying the benefits of sound monetary regimes, nor is it coincidental that monetary collapse has usually accompanied the collapse of a civilization. The Bitcoin Standard is the essential resource for a clear understanding of the rise of the Internet's decentralized, apolitical, free-market alternative to national central banks.