The Bitcoin Standard: The Decentralized Alternative to Central Banking

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As a dollarised economy, the US dollar will continue to serve as fiat currency alongside Bitcoin, but the move positions Bitcoin—the world’s leading cryptocurrency—as a transactional standard in the country. In conclusion, the Bitcoin coders face a strong incentive to abide by consensus rules if they are to have their code adopted. The miners have to abide by the network consensus rules to receive compensation for the resources they spend on proof‐of‐work. The network members face a strong incentive to remain on the consensus rules to ensure they can clear their transactions on the network.

Bitcoin Standard: The Decentralized Alternative to The Bitcoin Standard: The Decentralized Alternative to

Sound money allows people to think about the long-term and to save and invest more for the future. Saving and investing for the long run are the key to capital accumulation and the advance of human civilization. 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. In other words, investment raises the productivity of the producer. The war machines that the government‐directed economies built were far more advanced than any the world had ever seen, thanks to the popularity of the most dangerous and absurd of all Keynesian fallacies In a free market economic system, prices are knowledge, and the signals that communicate information.

Considering "politics" in the digital space (because money is inextricably tied to politics) has forced me to evaluate and work with some things. Now of course cash (which is what Bitcoin is) in and of itself on a functional basis is non political. It's simply cash. Yet a lot of the innovations and cryptographic history behind bitcoin have come out of the more libertarian/anarchist mindset. Certain ideas of libertarians have always appealed to me and this book is a libertarian (Austrian school specifically) perspective. For example, none of us like big government and big tech peeking into our lives and date and I don't believe anything which doesn't directly harm another should be illegal. I certainly agree with the rules being the same for everyone, multinationals included. Note: Seems a bit much? I think the underlying point that money has a lot of downstream effects is good though

Bitcoin Standard Podcast - Saifedean Ammous The Bitcoin Standard Podcast - Saifedean Ammous

But it is in this same chapter that I started to see some of Saifedean’s bias or overindulgence: he seems to believe that a monetary standard is almost the sole determinant of a society’s fate. Describing Europe after the fall of Rome, he says “…the absence of a widely accepted sound monetary standard severely restricted the scope for trade, closing societies off from one another and enhancing parochialism as once-prosperous and civilized trading societies fell into the Dark Ages of serfdom, diseases, closed-mindedness, and religious persecution.” (pg. 29) Surely, there were many other factors at play beyond just the monetary standards of the time. Furthermore, how can this claim co-exist with the modern state of affairs, in which we have no sound monetary standard but worldwide trade is busier and richer than ever? While bitcoin is a new invention of the digital age, the problem it purports to solve is as old as human society itself: transferring value across time and space. Ammous takes the listener on an engaging journey through the history of technologies performing the functions of money, from primitive systems of trading limestones and seashells, to metals, coins, the gold standard, and modern government debt. Exploring what gave these technologies their monetary role, and how most lost it, provides the listener with a good idea of what makes for sound money, and sets the stage for an economic discussion of its consequences for individual and societal future-orientation, capital accumulation, trade, peace, culture, and art. 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 only way to make maturity mismatching safe is with the presence of a lender of last resort standing ready to lend to banks in case of a bank run. But dreams of a return to a halcyon gold standard, of gold as a world reserve currency, are misguided—and not merely due to the technological limitations. Monetary and fiscal policy are firmly established tools of government—with plenty of additional beneficiaries. It’s difficult to see how any entity would willingly relinquish this kind of control. Friedrich Hayek voiced some awareness of this in a 1984 interview quoted by Ammous: “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.” Human life is lived with uncertainty as a given, and humans cannot know for sure when they will need what amount of money.

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Nero, who ruled from 54–68 AD, had found the formula to solve this, which was highly similar to Keynes’s solution to Britain’s and the U.S.’s problems after World War I: devaluing the currency would at once reduce the real wages of workers, reduce the burden of the government in subsidizing staples, and provide increased money for financing other government expenditure.