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賮賷 丕賱兀賵賱 賲賳 賳賵賮賲亘乇 毓丕賲 2008貙 兀乇爻賱 賲亘乇賲噩 丨丕爻賵亘 亘丕賱丕爻賲 丕賱賲購爻鬲毓丕乇 "爻丕鬲賵卮賷 賳丕賰丕賲賵鬲賵" 亘乇賷丿丕賸 廿賱賰鬲乇賵賳賷丕賸 廿賱賶 賯丕卅賲丞 亘乇賷丿賷丞 賲購卮賮賻賾乇丞 賱賷購毓賱賳 兀賳賴 兀賳鬲噩 "賳馗丕賲丕賸 賳賯丿賷丕賸 廿賱賰鬲乇賵賳賷丕賸 噩丿賷丿丕賸 賷毓賲賱 亘卮賰賱 賰丕賲賱 賰賳馗丕賲 賳馗賷乇 廿賱賶 賳馗賷乇貙 丿賵賳 丨丕噩丞賺 賱賵噩賵丿 胤乇賮 孬丕賱孬 賲賵孬賵賯 亘賴". 賵賯丿 鬲賲 賳爻禺 賲賱禺氐 丕賱賲爻鬲賳丿 丕賱匕賷 賷卮乇丨 丕賱鬲氐賲賷賲貙 賵鬲賲 賵囟毓 乇丕亘胤 賱賴 毓賱賶 卮亘賰丞 丕賱廿賳鬲乇賳鬲. 賮賮賷 噩賵賴乇賴貙 賯丿賻賾賲 丕賱亘賷鬲賰賵賷賳 卮亘賰丞 丿賮毓 亘賵爻丕胤丞 毓賲賱鬲賴 丕賱禺丕氐丞貙 賵丕爻鬲禺丿賻賲 胤乇賷賯丞 賲鬲胤賵乇丞 賱賷鬲丨賯賯 丕賱兀毓囟丕亍 賮賷賴丕 賲賳 噩賲賷毓 丕賱鬲丨賵賷賱丕鬲 丿賵賳 丨丕噩丞 賱賱賵孬賵賯 亘兀賷 毓囟賵 賲賳 兀毓囟丕亍 丕賱卮亘賰丞. 賵鬲賲 廿氐丿丕乇 丕賱毓賲賱丞 亘賲毓丿賱 賲購丨丿賻賾丿 爻賱賮丕賸 賱賲賰丕賮兀丞 丕賱兀毓囟丕亍 丕賱匕賷賳 兀賳賮賯賵丕 胤丕賯丞 丕賱賲毓丕賱噩丞 賱賱鬲丨賯賯 賲賳 氐丨丞 丕賱鬲丨賵賷賱丕鬲 賱賽鬲購丐賲賽賾賳 亘丕賱鬲丕賱賷 賲賰丕賮兀丞 賱賴賲 毓賱賶 毓賲賱賴賲. 賵丕賱兀賲乇 丕賱賲匕賴賱 賮賷 賴匕丕 丕賱丕禺鬲乇丕毓 賴賵 兀賳賴 禺賱丕賮丕賸 賱賱聼
302 pages, Kindle Edition
First published March 23, 2018
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About the author
Saifedean Ammous
14听books544听followersSaifedean Ammous is an internationally best-selling author and economist. In 2018, Ammous authored The Bitcoin Standard: The Decentralized Alternative to Central Banking, the best-selling book on bitcoin, published in 36 languages. In 2021, he published The Fiat Standard: The Debt Slavery Alternative to Human Civilization, available in 12 languages. In 2023, he published Principles of Economics, a comprehensive introduction to economics in the Austrian school tradition. Saifedean teaches courses on the economics of bitcoin, and economics in the Austrian school tradition, on his online learning platform Saifedean.com, and also hosts The Bitcoin Standard Podcast.
Saifedean was a professor of Economics at the Lebanese American University from 2009 to 2019. He holds a PhD in Sustainable Development from Columbia University, a Masters in Development Management from the London School of Economics, and a Bachelor in Mechanical Engineering from the American University of Beirut.
Saifedean was a professor of Economics at the Lebanese American University from 2009 to 2019. He holds a PhD in Sustainable Development from Columbia University, a Masters in Development Management from the London School of Economics, and a Bachelor in Mechanical Engineering from the American University of Beirut.
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Displaying 1 - 30 of 1,293 reviews
March 15, 2020
As I see it, this book is made up of three distinct sections/essays:
The first 10% (5 stars):
Potentially the best explanation of the characteristics of money and how they work together to solve the "coincidence of wants" issue.
The next 50% (0 stars):
Think of the obnoxious frat bro who just read Ayn Rand for the first time and now has the world completely figured out, or the stoner who believes that the illegality of pot is the cause of all the planet's suffering: it's the sort of exaggerated, tenuously-connected rambling that occurs when someone stumbles across a decent idea and thinks that it is *THE* grand unifying idea that cures all ills.
In brief, the author asserts that our current, fiat monetary system is responsible for an increase in wars and violent crime, the decline in the quality of art and music, and the lack of major technological inventions. Quite frankly, I didn't find the author's arguments that these "trends" are actually occurring convincing, so blaming them on a monetary system seems to be putting the cart before the horse.
Apropos of nothing, he also claims John Maynard Keynes was a gay pedophile and "a failed investor." While I can't comment on the first claim beyond noting that the supporting evidence is rather circumstantial and weak, I can say definitively that Keynes was one of the *BEST* investors of all time. He nearly quintupled the value of the King's College endowment over 19 years while the UK stock market FELL 15%. These types of easily-falsifiable claims undermine any reasonable points the author attempts to make.
It's also worth noting that there was no meaningful mention of bitcoin throughout this part of the book.
The last 40% (5 stars):
When the author gets back on the actual topic of the book (and away from his conspiracy theory ramblings), the text makes a compelling case for the potential of bitcoin. While I would argue that he remains too dogmatic/pessimistic about the utility of other cryptoassets, the conversation about bitcoin (including his endorsement for second-layer solutions to the scaling issue) is balanced and convincing.
Overall rating: 2.5 stars - rounded up to 3. Just save your time and skip the middle 50%!
The first 10% (5 stars):
Potentially the best explanation of the characteristics of money and how they work together to solve the "coincidence of wants" issue.
The next 50% (0 stars):
Think of the obnoxious frat bro who just read Ayn Rand for the first time and now has the world completely figured out, or the stoner who believes that the illegality of pot is the cause of all the planet's suffering: it's the sort of exaggerated, tenuously-connected rambling that occurs when someone stumbles across a decent idea and thinks that it is *THE* grand unifying idea that cures all ills.
In brief, the author asserts that our current, fiat monetary system is responsible for an increase in wars and violent crime, the decline in the quality of art and music, and the lack of major technological inventions. Quite frankly, I didn't find the author's arguments that these "trends" are actually occurring convincing, so blaming them on a monetary system seems to be putting the cart before the horse.
Apropos of nothing, he also claims John Maynard Keynes was a gay pedophile and "a failed investor." While I can't comment on the first claim beyond noting that the supporting evidence is rather circumstantial and weak, I can say definitively that Keynes was one of the *BEST* investors of all time. He nearly quintupled the value of the King's College endowment over 19 years while the UK stock market FELL 15%. These types of easily-falsifiable claims undermine any reasonable points the author attempts to make.
It's also worth noting that there was no meaningful mention of bitcoin throughout this part of the book.
The last 40% (5 stars):
When the author gets back on the actual topic of the book (and away from his conspiracy theory ramblings), the text makes a compelling case for the potential of bitcoin. While I would argue that he remains too dogmatic/pessimistic about the utility of other cryptoassets, the conversation about bitcoin (including his endorsement for second-layer solutions to the scaling issue) is balanced and convincing.
Overall rating: 2.5 stars - rounded up to 3. Just save your time and skip the middle 50%!
April 16, 2018
This book has a few flaws but I'm pretty sure, it is the most complete and easiest to understand and most factually correct book on bitcoin available right now. If you want to learn about bitcoin, and more importantly about money in general, this is a great and quick read by a clearly intelligent author.
Chapter 1 defines what is money in theory. Chapter 2 shows examples of primitive monies from the past. Chapter 3 raves about Gold as the best form of money man has known so far. Chapters 4-7 get a bit blurry and repetitive and preach about how governments have fucked up Gold as a sound money and basically enslaved us all. Up until this point there is no mention of bitcoin, so this is a good read for pretty much everyone. I learned a lot here and I wished this stuff would have been taught in school.
The author is a clear subscriber of the Austrian school of economics and spends many words in debunking and attacking the works of Keynes, even pointing out on several occasions that Keynes was a filthy little child-sex-tourist who never in his life studied economics and inherited all his wealth from his parents (who profited from an era of wealth accumulation powered by sound money, the irony!).
I have personally no idea if the world would be a better or worse place today if we had continued with a free market and following the Austrian school of economics. Saifedean's views of the golden past are probably simplistic and the problems of today's globally connected and overpopulated world are probably far more complex than the author (or anyone on the planet) could possibly understand - BUT I can see with my own eyes that my generation's buying power is absolutely ridiculous compared to my parent's generation, despite us working significantly longer hours in supposedly much higher classed and higher paid jobs.
There is an entire chapter about how sound money enabled better art and today's artists are somehow all unskilled hacks, which was written in a quite emotional and entertaining way but is probably utter bullshit. Claiming that no art today can stand the test of time like the Mozart's, Bach's and Michelangelo's of days gone by is probably a gross generalisation and not true. First of all, Mozart, Bach and Michelangelo were but three lucky bastards that we remember today. Who is to say that in their times there was an overwhelming number of "hacks" just as there is today which the world simply has forgotten about now? Furthermore, who is to say that 100 years from now, we will look back at an equally small number of genius artists that lived today and stood the test of time (spoiler alert: it will happen). I'm always very cautious of the "back then everything was better" argument. I think we still have the same amount of artists today, they are just more difficult to find because every idiot is able to create, so there is much more noise now.
In general, I would say, that Chapters 4-7 were not focused enough and too preachy and could have answered their headline's premises in half the amount of pages. It's a pretty good propaganda for the Austrian school of economics, and since I have no problems with that school of thought, I didn't mind slogging through the repetitive parts.
In chapters 8-10 we finally get to learn about bitcoin, and with the foundation that was laid out in the earlier chapters it becomes clear that bitcoin truly is an invention of the century, something so profound and groundbreaking, no one alive today will likely witness anything like it again. As a software engineer who has spent the last five years reading everything there is about bitcoin, I can say that everything the author says about bitcoin is correct. By the way, this is the work of a true bitcoin maximalist, so if you are just interested in "blockchain" or in "crypto", this book will leave a sour taste - but rightfully so. I too think that all altcoins in existence are scams and speculative assets for traders (read: gamblers) and they will eventually disappear as bitcoin continues to cement it's role as the one and only blockchain that actually solves a real world problem.
If you want to learn about the history of money, monetary policy, schools of economics and of course how it all connects with bitcoin, this book is the best work there is today. Please go and read it and join the revolution ;)
Chapter 1 defines what is money in theory. Chapter 2 shows examples of primitive monies from the past. Chapter 3 raves about Gold as the best form of money man has known so far. Chapters 4-7 get a bit blurry and repetitive and preach about how governments have fucked up Gold as a sound money and basically enslaved us all. Up until this point there is no mention of bitcoin, so this is a good read for pretty much everyone. I learned a lot here and I wished this stuff would have been taught in school.
The author is a clear subscriber of the Austrian school of economics and spends many words in debunking and attacking the works of Keynes, even pointing out on several occasions that Keynes was a filthy little child-sex-tourist who never in his life studied economics and inherited all his wealth from his parents (who profited from an era of wealth accumulation powered by sound money, the irony!).
I have personally no idea if the world would be a better or worse place today if we had continued with a free market and following the Austrian school of economics. Saifedean's views of the golden past are probably simplistic and the problems of today's globally connected and overpopulated world are probably far more complex than the author (or anyone on the planet) could possibly understand - BUT I can see with my own eyes that my generation's buying power is absolutely ridiculous compared to my parent's generation, despite us working significantly longer hours in supposedly much higher classed and higher paid jobs.
There is an entire chapter about how sound money enabled better art and today's artists are somehow all unskilled hacks, which was written in a quite emotional and entertaining way but is probably utter bullshit. Claiming that no art today can stand the test of time like the Mozart's, Bach's and Michelangelo's of days gone by is probably a gross generalisation and not true. First of all, Mozart, Bach and Michelangelo were but three lucky bastards that we remember today. Who is to say that in their times there was an overwhelming number of "hacks" just as there is today which the world simply has forgotten about now? Furthermore, who is to say that 100 years from now, we will look back at an equally small number of genius artists that lived today and stood the test of time (spoiler alert: it will happen). I'm always very cautious of the "back then everything was better" argument. I think we still have the same amount of artists today, they are just more difficult to find because every idiot is able to create, so there is much more noise now.
In general, I would say, that Chapters 4-7 were not focused enough and too preachy and could have answered their headline's premises in half the amount of pages. It's a pretty good propaganda for the Austrian school of economics, and since I have no problems with that school of thought, I didn't mind slogging through the repetitive parts.
In chapters 8-10 we finally get to learn about bitcoin, and with the foundation that was laid out in the earlier chapters it becomes clear that bitcoin truly is an invention of the century, something so profound and groundbreaking, no one alive today will likely witness anything like it again. As a software engineer who has spent the last five years reading everything there is about bitcoin, I can say that everything the author says about bitcoin is correct. By the way, this is the work of a true bitcoin maximalist, so if you are just interested in "blockchain" or in "crypto", this book will leave a sour taste - but rightfully so. I too think that all altcoins in existence are scams and speculative assets for traders (read: gamblers) and they will eventually disappear as bitcoin continues to cement it's role as the one and only blockchain that actually solves a real world problem.
If you want to learn about the history of money, monetary policy, schools of economics and of course how it all connects with bitcoin, this book is the best work there is today. Please go and read it and join the revolution ;)
January 29, 2022
I thought this was a clear, well-written explanation of the history of money, the rise of Bitcoin and it's potential benefits plus the uses Blockchain technology can be put to.
The author clearly doesn't like many other famous economists such as Keynes.
Altcoins don't fare well.
Having read a few other articles about cryptocurrencies, I admire this book even more. Having said that, I think an updated version of this book will be due in 2-3 years time as Decentralised Finance is one area where things are changing rapidly.
The author clearly doesn't like many other famous economists such as Keynes.
Altcoins don't fare well.
Having read a few other articles about cryptocurrencies, I admire this book even more. Having said that, I think an updated version of this book will be due in 2-3 years time as Decentralised Finance is one area where things are changing rapidly.
March 21, 2020
While I'm sympathetic to many of the ideas in this book, they are very poorly argued. The first half of the book or so is about the economics of hard money. The author could have charitably considered the pros and cons of such a system and examined alternatives in detail. Instead we are presented with juvenile arguments that give the impression the author has read very little about monetary economics. To the extent alternative views are presented, the author does so only to strawman them. Professional economists would find this section of the book cringeworthy.
The second half of the book is largely raw Bitcoin Maximalism. Not all of it is wrong per se, but it reeks of a zealotry. The sections of the book covering the scaling debate are incredibly biased, presented without nuance, and even factually wrong in many places.
The book gives the impression that the author is an expert on all things Bitcoin, yet there are hints that he does not have a deep technical understanding at all. For example, the author states repeatedly that the block size must be kept low so that ordinary computers can run full nodes. However, in a section trashing the corporate use of "blockchain technology" he correctly states that a "regular off-the-shelf consumer laptop can be made to process around 14,000 transaction per second, or all of Bitcoin's current daily transaction volume in 20 seconds. To process Bitcoin's entire yearly transaction volume, a laptop would need little more than two hours".
Yet a few paragraphs later he says that the block size must still be restricted to 1 MB so that the "operation of the ledger" doesn't become too complex. But what is this mysterious "operation of the ledger" that prevents regular off-the-shelf consumer laptops from running a node despite being able to process all of Bitcoin's yearly volume in two hours?
Hint, there isn't anything. The author just doesn't understand what nodes are doing under the hood to realize the processing of transactions as he described it is basically the extent of what a node does.
Several times he mentions the bottleneck for running a node is storing the blockchain, but he doesn't seem to know that 1) storage is extremely cheap and 2) you don't need to store the blockchain to process transactions. Pruned nodes, which delete the historical blockchain, are still able to process transactions (and with more advanced technologies like UTXO commitments, can even bootstrap new nodes as well).
Finally, he spends a large portion of the book criticizing financial intermediaries and talking about how superior Bitcoin is because you control your own keys and control your own funds. However, when he discusses scaling he suggests that to actually use Bitcoin ordinary people will have to deposit their funds with third party custodians, essentially giving up control of their keys, as the 1 MB of restricted block space will be reserved for the clearing of financial institutions and ultra large corporations. And he presents this without any sense of irony or realizing his contradiction.
All in all the book might be OK to give to someone who knows absolutely nothing about economics or Bitcoin as sort of a first foray into these topics, but if anyone knows anything about either, they will be able to spot the sloppy arguments very quickly.
The second half of the book is largely raw Bitcoin Maximalism. Not all of it is wrong per se, but it reeks of a zealotry. The sections of the book covering the scaling debate are incredibly biased, presented without nuance, and even factually wrong in many places.
The book gives the impression that the author is an expert on all things Bitcoin, yet there are hints that he does not have a deep technical understanding at all. For example, the author states repeatedly that the block size must be kept low so that ordinary computers can run full nodes. However, in a section trashing the corporate use of "blockchain technology" he correctly states that a "regular off-the-shelf consumer laptop can be made to process around 14,000 transaction per second, or all of Bitcoin's current daily transaction volume in 20 seconds. To process Bitcoin's entire yearly transaction volume, a laptop would need little more than two hours".
Yet a few paragraphs later he says that the block size must still be restricted to 1 MB so that the "operation of the ledger" doesn't become too complex. But what is this mysterious "operation of the ledger" that prevents regular off-the-shelf consumer laptops from running a node despite being able to process all of Bitcoin's yearly volume in two hours?
Hint, there isn't anything. The author just doesn't understand what nodes are doing under the hood to realize the processing of transactions as he described it is basically the extent of what a node does.
Several times he mentions the bottleneck for running a node is storing the blockchain, but he doesn't seem to know that 1) storage is extremely cheap and 2) you don't need to store the blockchain to process transactions. Pruned nodes, which delete the historical blockchain, are still able to process transactions (and with more advanced technologies like UTXO commitments, can even bootstrap new nodes as well).
Finally, he spends a large portion of the book criticizing financial intermediaries and talking about how superior Bitcoin is because you control your own keys and control your own funds. However, when he discusses scaling he suggests that to actually use Bitcoin ordinary people will have to deposit their funds with third party custodians, essentially giving up control of their keys, as the 1 MB of restricted block space will be reserved for the clearing of financial institutions and ultra large corporations. And he presents this without any sense of irony or realizing his contradiction.
All in all the book might be OK to give to someone who knows absolutely nothing about economics or Bitcoin as sort of a first foray into these topics, but if anyone knows anything about either, they will be able to spot the sloppy arguments very quickly.
January 7, 2021
This book could have been much better... There are good parts to it, especially in the beginning, a historical review of money is very interesting. However pretty soon the author loses credibility in my eyes as it slowly switches from presenting facts and interesting analysis to the ramblings of a madman.
I have no issue with a certain level of subjectivity and bias in a book like this, but the extremes to which this goes is insane. As many reviewers previously mentioned already, the author blames all the "evils" of society from recessions and war to modern art and environmentalism on government's meddling in the economy, bad money and the lack of a 100% free market.
Although I agree with certain aspects of this assessment, it is clearly exaggerated and oversimplified. I also don't care at all about the author's approach to persuasion e.g. to name a few:
* he uses partial data to make a point
* he applies his own opinion on what is valuable to society
* he tries to discredit ideas by trying to discredit the people behind it
* he sometimes even contradicts himself while trying to make a point
A very clear contradiction that's stuck with me is when he basically says that modern art is crap and has no value, while people are pricing it to hundreds and millions of dollars; but at the same time he blames governments when they apply price regulations. Isn't it a core idea in Austrian economics that price is ultimately subjective? If people appreciate a painting to be a million dollars and are willing to pay that, then that's the price. I don't like it either when a painting that took just hours to produce and has 100% room for mistakes gets to be that valuable, while a painter that dedicated his whole life to practice and months to produce a complex piece of work with 0% room for mistakes may only be valued to a few dollars, but I respect the price because I respect the free market.
I have no issue with a certain level of subjectivity and bias in a book like this, but the extremes to which this goes is insane. As many reviewers previously mentioned already, the author blames all the "evils" of society from recessions and war to modern art and environmentalism on government's meddling in the economy, bad money and the lack of a 100% free market.
Although I agree with certain aspects of this assessment, it is clearly exaggerated and oversimplified. I also don't care at all about the author's approach to persuasion e.g. to name a few:
* he uses partial data to make a point
* he applies his own opinion on what is valuable to society
* he tries to discredit ideas by trying to discredit the people behind it
* he sometimes even contradicts himself while trying to make a point
A very clear contradiction that's stuck with me is when he basically says that modern art is crap and has no value, while people are pricing it to hundreds and millions of dollars; but at the same time he blames governments when they apply price regulations. Isn't it a core idea in Austrian economics that price is ultimately subjective? If people appreciate a painting to be a million dollars and are willing to pay that, then that's the price. I don't like it either when a painting that took just hours to produce and has 100% room for mistakes gets to be that valuable, while a painter that dedicated his whole life to practice and months to produce a complex piece of work with 0% room for mistakes may only be valued to a few dollars, but I respect the price because I respect the free market.
September 3, 2020
I don't understand the many mediocre reviews here.
I have read several on this topic now...and THIS is the book that everyone should read to understand the history of money from beads and rocks to the evolution of digital currency. Current fiscal policy is explained as regard to how money works and of how digital currency can change the world and why you can be confident in it.
Governments have control over money, meaning they have control over you. Bitcoin offers freedom from control and inflation. There will only ever be 21 million bitcoins (there are smaller denominations)--not like US dollars where the continual printing of more and more tends to devalue your money.
I could go on, but I wish that this book/topic was a class for high schoolers so they could better understand what money is, why it has value, and how invest in their futures as current fiscal policies cannot continue.
I have read several on this topic now...and THIS is the book that everyone should read to understand the history of money from beads and rocks to the evolution of digital currency. Current fiscal policy is explained as regard to how money works and of how digital currency can change the world and why you can be confident in it.
Governments have control over money, meaning they have control over you. Bitcoin offers freedom from control and inflation. There will only ever be 21 million bitcoins (there are smaller denominations)--not like US dollars where the continual printing of more and more tends to devalue your money.
I could go on, but I wish that this book/topic was a class for high schoolers so they could better understand what money is, why it has value, and how invest in their futures as current fiscal policies cannot continue.
April 6, 2020
I'd rather read dictionary from Z to A than try this book again.
I'm in 3/4 and there is still nothing interesting if you know a little bit about bitcoin and financial system.
A great read for university professors born before 1970 I guess.
I'm in 3/4 and there is still nothing interesting if you know a little bit about bitcoin and financial system.
A great read for university professors born before 1970 I guess.
February 11, 2019
Though the book contains some interesting stories about money, for the most part, it鈥檚 full of dogmatic assertions and circular reasoning of the kind from libertarian monetary school: All the boom and bust cycles are because the government controls the monetary policy, so let鈥檚 go back to Gold or the new age version 鈥� bitcoin. (Never mind in the mother of all bubbles, the tulip bulbs were bought and sold using gold coins.)
July 20, 2018
This book started off so promising. The first 30% is really solid. But then it seems like the editor stoped reading and the author decided to go off script. There were numerous attacks on institutions and process that just seemed petty. On top of that the attack鈥檚 rambled on with 0 citation. Instead of presenting the data and offering assessment for the reader to interpret the author added immense bias with no evidence. It got to the point that I stopped reading because even if what he was saying is true I had no way of validating.
Really disappointing and 2猸愶笍 because the first few chapters are a really good.
Really disappointing and 2猸愶笍 because the first few chapters are a really good.
May 23, 2018
Libertarian or "Austrian economics" explanation of money. Discussing the history and social impact then anticipating the role of bitcoin.
The book has a great explanation of the monetary property of gold. The stock to flow ratio was clearly described and illustrated a few times making a valuable concept very clear.
In other sections, the arguments were highly ideological. The argument about Keynes would more convincing if it was more disciplined particularly in describing specific positions. The argument that the gold standard could be characterized by price stability is made by comparing prices at the endpoints of gold standard periods. This doesn't mean there were stable prices during the periods and closer examination would, in fact, show otherwise.
The author thinks modern art is bad. I understand feeling that "today's music ain't got the same soul" but it hardly makes a solid monetary argument. He thinks environmentalists are wrong apparently on the basis of a peak resource theory of a single person.
The discussion about war had some very interesting points. I found myself wishing the author had done a better job of distinguishing between great points he had and others that were not helping his cause. Specifically, I would have liked to see an attempt to address a broader audience.
When he got around to the monetary role of Bitcoin he could show how bitcoin addresses the critical issues of money. The relation to government, the stable system design, and the antifragile development combine for a compelling value proposition.
The topic is a great one that people interested in Bitcoin should understand. I agree with many of the conclusions, but I think the book would benefit from being more careful and rigorous. I would recommend the New Lombard Street by Perry Mehrling (or his Money and Banking MOOC) for a more balanced background. I thought the book was very informative and had great potential but was ultimately disappointing.
The book has a great explanation of the monetary property of gold. The stock to flow ratio was clearly described and illustrated a few times making a valuable concept very clear.
In other sections, the arguments were highly ideological. The argument about Keynes would more convincing if it was more disciplined particularly in describing specific positions. The argument that the gold standard could be characterized by price stability is made by comparing prices at the endpoints of gold standard periods. This doesn't mean there were stable prices during the periods and closer examination would, in fact, show otherwise.
The author thinks modern art is bad. I understand feeling that "today's music ain't got the same soul" but it hardly makes a solid monetary argument. He thinks environmentalists are wrong apparently on the basis of a peak resource theory of a single person.
The discussion about war had some very interesting points. I found myself wishing the author had done a better job of distinguishing between great points he had and others that were not helping his cause. Specifically, I would have liked to see an attempt to address a broader audience.
When he got around to the monetary role of Bitcoin he could show how bitcoin addresses the critical issues of money. The relation to government, the stable system design, and the antifragile development combine for a compelling value proposition.
The topic is a great one that people interested in Bitcoin should understand. I agree with many of the conclusions, but I think the book would benefit from being more careful and rigorous. I would recommend the New Lombard Street by Perry Mehrling (or his Money and Banking MOOC) for a more balanced background. I thought the book was very informative and had great potential but was ultimately disappointing.
September 16, 2018
[Note: this is a pretty 鈥渞ough鈥� review. There was a lot of material in this book, and I hope at some point to give it a second read-through and then re-write this review, to provide a better survey of key points and a more nuanced treatment overall.]
First off, I鈥檓 grateful to Saifedean for writing this book. I found it informative and thought-provoking, and loaded with potent one-liners that capture some of Bitcoin鈥檚 most exciting characteristics, and refute some of the most common arguments against it. And, yes, I have more than a few objections to share as well. But on the whole, I consider it worthwhile reading for anyone who is interested in the history, and future, of monetary systems.
My favorite chapters were the first 4, which take us through phases of monetary evolution in history. Saifedean鈥檚 knowledge and expertise is on full display as he talks about seashells, Rai stones, glass beads, Roman gold coins (and the eventual debasement thereof), and the essential principles that underpin the trajectory and fate of each system. He clearly knows this territory well, and gives the reader a deft and lucid tour. He also does a fine job of introducing the principles of Austrian economics, as a counterpoint to the dominant Keynsian paradigm. I particularly liked the section on Roman and post-Roman coinage, which intimates that the fate of an empire can be very closely tied to how responsible or irresponsible of a monetary policy it maintains.
But it is in this same chapter that I started to see some of Saifedean鈥檚 bias or overindulgence: he seems to believe that a monetary standard is almost the sole determinant of a society鈥檚 fate. Describing Europe after the fall of Rome, he says 鈥溾€he 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.鈥� (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?
I had similar reactions at several other points in the book, where the author鈥檚 reasoning or rhetoric seemed biased, unconvincing, or borderline specious. So, while I much appreciate the information that Saifedean brings to the table, I have to treat his arguments with skepticism. Which is not to say that all his conclusions are off-base. At many points throughout the book, he offers punchy, blunt summaries that successfully capture the essence of a complex topic. But his beliefs about the paramount importance of a society鈥檚 monetary standard, and his seething hatred of everything Keynesian (he really cannot resist throwing mud at Keynesian economics, and does so unnecessarily, at several points in the book), detract from his trustworthiness as an author.
I also have to say that the book seems poorly edited; the text seems littered with inadvertent repetition and some chapters contain lengthy, opinionated tangents. I suppose the fact that I keep referring to the author by his first name reveals that I have trouble seeing him as a professional author; he comes across rather as an opinionated economist who decided to dump his mind out onto paper, with mixed results. Chapter 5, 鈥淢oney and Time Preference,鈥� inexplicably contains a multi-page rant about modern art, how terrible it is, and how it鈥檚 all the fault of unsound money. And, for a book that purports to introduce Bitcoin as the next key stage of monetary evolution, it sure drops the ball on actually making that introduction. Saifedean kinds of slides into the topic of Bitcoin sideways, in a way that makes it clear that he is already convinced that Bitcoin is the future, and more or less assumes that the reader is too.
When we reach the chapters on Bitcoin, the book鈥檚 tenuous structure completely collapses. This begins with chapter 8, which inexplicably includes its own one-page appendix perched awkwardly in the main text before chapter 9. And chapter 10, 鈥淏itcoin Questions,鈥� is the worst offender: is it supposed to be the concluding chapter, or more of an appendix? Is it supposed to read like a FAQ, or something else? Three of the chapter鈥檚 sections are headed by actual questions like 鈥淐an Bitcoin Scale?鈥�, but the majority are simply topics, like 鈥淎ntifragility鈥� or 鈥淏lockchain Technology.鈥� The chapter really seems tacked on, a sort of repository for topics and rants that Saifedean didn鈥檛 find a place for earlier in the text. It鈥檚 a very scattered way to end the book.
One more 鈥渉uh?" moment for me came in Chapter 9, 鈥淲hat Is Bitcoin Good For.鈥� I was quite surprised to see Saifedean advance the idea of 鈥淏itcoin-backed banks鈥� as the centerpiece of the new paradigm. He seems to take it as a given that, due to current issues with scaling Bitcoin to handle more of the transaction volume of everyday global commerce, Bitcoin will not be used directly for commerce, but instead as a settlement-only layer, mostly among banks, which will issue Bitcoin-backed notes or securities for use in retail commerce. From my perspective, this completely misses the point of Bitcoin. Bitcoin is new and different precisely in that it steps past the need for banks and their allegedly backed notes. History has shown us time and time again how that always plays out. If Bitcoin is to be held by banks, and retail commerce is to be conducted in some kind of pseudo-Bitcoin certificates, have we really changed anything? Have we fixed the problems with the current paradigm? I don鈥檛 think so. Bitcoin is new and different and valuable because it is strictly finite, and easy to transfer without any abstraction or 3rd parties. If we go back to the legacy banking paradigm, in order to get around transaction volume scaling issues that I think are very temporary, then we have completely lost the opportunity that Bitcoin provides. Bitcoin is a truly scarce resource, and it belongs in the hands of the people, not banks. By casually suggesting a future of 鈥淏itcoin-backed banks,鈥� Saifedean does a serious disservice to BItcoin鈥檚 real potential, and to the real revolutions that it could bring about.
As much as I was incensed by Saifedean鈥檚 rants, rough edges, and missteps, I also kind of relished reading the book for the same reasons. It is stimulating to read an author that you kind of dislike! It kept me on edge, and I filled the book鈥檚 margins with my own snarky comments, questions, and rebuttals. Reading this book challenged me to firm up my own perspective, and to be on high alert in terms of seeing the author鈥檚 biases and framework, and checking the validity of each argument presented. One specific thing I鈥檒l mention: while Saifedean stands apart from mainstream economists by subscribing to the Austrian, rather than Keynesian, school of thought, he is nonetheless a very typical economist is how he oversimplifies human behavior and the nature of economy and ecology here on earth. He holds the assumption that productivity is still the highest good - the determiner of all human wellbeing - and that a person鈥檚 who life is fundamentally economic, i.e. best understood through the lens of productivity and capital. And in terms of the larger systems that the human economy exists within, he sounds downright clueless. He opens chapter 9 with the very outlandish claim that 鈥淭he absolute quantity of every raw material present in earth is too large for us as human beings to even measure or comprehend, and in no way constitutes a real limit to what we as humans can produce of it.鈥� Um鈥� how about trees? Fish? Clean air? Arable soil? These are very finite, and in many cases, already exhausted. It troubles me that a professor of economics can have such a large blind spot. He then goes on to say 鈥渉uman time鈥� is the only real scarce resource,鈥� and he keeps doubling down on this, with further statements like 鈥淩aw materials are always the product of human labor鈥� and thus humans are the ultimate resource.鈥� This mindset seems so distorted to me that I don鈥檛 even know how to really approach it. Saifedean thinks that all economic activity starts with 鈥減roduction,鈥� and uses the example of a fishing trawler that goes out and 鈥減roduces鈥� fish. The world he sees is one in which human labor and time 鈥減roduces鈥� valuable goods out of some kind of infinite raw ether. To me this mindset appears dangerously primitive.
I鈥檓 a little disappointed than an Austrian economist like Saifedean did not offer any kind of alternative vision of what capitalism can look like. He does describe how sound money leads to longer-term thinking, wiser capital investments, but the examples he gives seem short-sighted, like the investment in a fishing trawler to 鈥渋ncrease production.鈥� He still holds up productivity and capital growth as the ultimate aims. Which to me, suggests a mindset that is still rooted in infinite-growth economics, and so I think there is a missed opportunity to face a harder, larger conversation about how growth can鈥檛 go on forever. Earth is a finite system. I hope that a return to sound money, a money like Bitcoin with a truly finite supply, could signal a move away from the need for perpetual growth, and towards some kind of steadier-state economic paradigm, that encourages human and ecological flourishing without the kind of ravenous, cancerous, fundamentally unsustainable growth that we see today, and that seems deeply responsible for our growing number of ecological and social crises. I wish we could have more of a conversation about that, but The Bitcoin Standard certainly doesn鈥檛 go there, as much as I wish it would. At a minimum, I have some good ideas for questions and challenges I鈥檇 love to share with Saifedean if I ever get a chance to talk with him directly. It鈥檚 too bad he鈥檚 already blocked me on Twitter.
First off, I鈥檓 grateful to Saifedean for writing this book. I found it informative and thought-provoking, and loaded with potent one-liners that capture some of Bitcoin鈥檚 most exciting characteristics, and refute some of the most common arguments against it. And, yes, I have more than a few objections to share as well. But on the whole, I consider it worthwhile reading for anyone who is interested in the history, and future, of monetary systems.
My favorite chapters were the first 4, which take us through phases of monetary evolution in history. Saifedean鈥檚 knowledge and expertise is on full display as he talks about seashells, Rai stones, glass beads, Roman gold coins (and the eventual debasement thereof), and the essential principles that underpin the trajectory and fate of each system. He clearly knows this territory well, and gives the reader a deft and lucid tour. He also does a fine job of introducing the principles of Austrian economics, as a counterpoint to the dominant Keynsian paradigm. I particularly liked the section on Roman and post-Roman coinage, which intimates that the fate of an empire can be very closely tied to how responsible or irresponsible of a monetary policy it maintains.
But it is in this same chapter that I started to see some of Saifedean鈥檚 bias or overindulgence: he seems to believe that a monetary standard is almost the sole determinant of a society鈥檚 fate. Describing Europe after the fall of Rome, he says 鈥溾€he 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.鈥� (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?
I had similar reactions at several other points in the book, where the author鈥檚 reasoning or rhetoric seemed biased, unconvincing, or borderline specious. So, while I much appreciate the information that Saifedean brings to the table, I have to treat his arguments with skepticism. Which is not to say that all his conclusions are off-base. At many points throughout the book, he offers punchy, blunt summaries that successfully capture the essence of a complex topic. But his beliefs about the paramount importance of a society鈥檚 monetary standard, and his seething hatred of everything Keynesian (he really cannot resist throwing mud at Keynesian economics, and does so unnecessarily, at several points in the book), detract from his trustworthiness as an author.
I also have to say that the book seems poorly edited; the text seems littered with inadvertent repetition and some chapters contain lengthy, opinionated tangents. I suppose the fact that I keep referring to the author by his first name reveals that I have trouble seeing him as a professional author; he comes across rather as an opinionated economist who decided to dump his mind out onto paper, with mixed results. Chapter 5, 鈥淢oney and Time Preference,鈥� inexplicably contains a multi-page rant about modern art, how terrible it is, and how it鈥檚 all the fault of unsound money. And, for a book that purports to introduce Bitcoin as the next key stage of monetary evolution, it sure drops the ball on actually making that introduction. Saifedean kinds of slides into the topic of Bitcoin sideways, in a way that makes it clear that he is already convinced that Bitcoin is the future, and more or less assumes that the reader is too.
When we reach the chapters on Bitcoin, the book鈥檚 tenuous structure completely collapses. This begins with chapter 8, which inexplicably includes its own one-page appendix perched awkwardly in the main text before chapter 9. And chapter 10, 鈥淏itcoin Questions,鈥� is the worst offender: is it supposed to be the concluding chapter, or more of an appendix? Is it supposed to read like a FAQ, or something else? Three of the chapter鈥檚 sections are headed by actual questions like 鈥淐an Bitcoin Scale?鈥�, but the majority are simply topics, like 鈥淎ntifragility鈥� or 鈥淏lockchain Technology.鈥� The chapter really seems tacked on, a sort of repository for topics and rants that Saifedean didn鈥檛 find a place for earlier in the text. It鈥檚 a very scattered way to end the book.
One more 鈥渉uh?" moment for me came in Chapter 9, 鈥淲hat Is Bitcoin Good For.鈥� I was quite surprised to see Saifedean advance the idea of 鈥淏itcoin-backed banks鈥� as the centerpiece of the new paradigm. He seems to take it as a given that, due to current issues with scaling Bitcoin to handle more of the transaction volume of everyday global commerce, Bitcoin will not be used directly for commerce, but instead as a settlement-only layer, mostly among banks, which will issue Bitcoin-backed notes or securities for use in retail commerce. From my perspective, this completely misses the point of Bitcoin. Bitcoin is new and different precisely in that it steps past the need for banks and their allegedly backed notes. History has shown us time and time again how that always plays out. If Bitcoin is to be held by banks, and retail commerce is to be conducted in some kind of pseudo-Bitcoin certificates, have we really changed anything? Have we fixed the problems with the current paradigm? I don鈥檛 think so. Bitcoin is new and different and valuable because it is strictly finite, and easy to transfer without any abstraction or 3rd parties. If we go back to the legacy banking paradigm, in order to get around transaction volume scaling issues that I think are very temporary, then we have completely lost the opportunity that Bitcoin provides. Bitcoin is a truly scarce resource, and it belongs in the hands of the people, not banks. By casually suggesting a future of 鈥淏itcoin-backed banks,鈥� Saifedean does a serious disservice to BItcoin鈥檚 real potential, and to the real revolutions that it could bring about.
As much as I was incensed by Saifedean鈥檚 rants, rough edges, and missteps, I also kind of relished reading the book for the same reasons. It is stimulating to read an author that you kind of dislike! It kept me on edge, and I filled the book鈥檚 margins with my own snarky comments, questions, and rebuttals. Reading this book challenged me to firm up my own perspective, and to be on high alert in terms of seeing the author鈥檚 biases and framework, and checking the validity of each argument presented. One specific thing I鈥檒l mention: while Saifedean stands apart from mainstream economists by subscribing to the Austrian, rather than Keynesian, school of thought, he is nonetheless a very typical economist is how he oversimplifies human behavior and the nature of economy and ecology here on earth. He holds the assumption that productivity is still the highest good - the determiner of all human wellbeing - and that a person鈥檚 who life is fundamentally economic, i.e. best understood through the lens of productivity and capital. And in terms of the larger systems that the human economy exists within, he sounds downright clueless. He opens chapter 9 with the very outlandish claim that 鈥淭he absolute quantity of every raw material present in earth is too large for us as human beings to even measure or comprehend, and in no way constitutes a real limit to what we as humans can produce of it.鈥� Um鈥� how about trees? Fish? Clean air? Arable soil? These are very finite, and in many cases, already exhausted. It troubles me that a professor of economics can have such a large blind spot. He then goes on to say 鈥渉uman time鈥� is the only real scarce resource,鈥� and he keeps doubling down on this, with further statements like 鈥淩aw materials are always the product of human labor鈥� and thus humans are the ultimate resource.鈥� This mindset seems so distorted to me that I don鈥檛 even know how to really approach it. Saifedean thinks that all economic activity starts with 鈥減roduction,鈥� and uses the example of a fishing trawler that goes out and 鈥減roduces鈥� fish. The world he sees is one in which human labor and time 鈥減roduces鈥� valuable goods out of some kind of infinite raw ether. To me this mindset appears dangerously primitive.
I鈥檓 a little disappointed than an Austrian economist like Saifedean did not offer any kind of alternative vision of what capitalism can look like. He does describe how sound money leads to longer-term thinking, wiser capital investments, but the examples he gives seem short-sighted, like the investment in a fishing trawler to 鈥渋ncrease production.鈥� He still holds up productivity and capital growth as the ultimate aims. Which to me, suggests a mindset that is still rooted in infinite-growth economics, and so I think there is a missed opportunity to face a harder, larger conversation about how growth can鈥檛 go on forever. Earth is a finite system. I hope that a return to sound money, a money like Bitcoin with a truly finite supply, could signal a move away from the need for perpetual growth, and towards some kind of steadier-state economic paradigm, that encourages human and ecological flourishing without the kind of ravenous, cancerous, fundamentally unsustainable growth that we see today, and that seems deeply responsible for our growing number of ecological and social crises. I wish we could have more of a conversation about that, but The Bitcoin Standard certainly doesn鈥檛 go there, as much as I wish it would. At a minimum, I have some good ideas for questions and challenges I鈥檇 love to share with Saifedean if I ever get a chance to talk with him directly. It鈥檚 too bad he鈥檚 already blocked me on Twitter.
August 25, 2021
Siempre suelo decir que hablar de econom铆a en t茅rminos nominales, es decir, expresada en dinero y precios, nos nubla el entendimiento de lo realmente relevante para el bienestar de las personas; a saber, la producci贸n e intercambio de bienes y servicios reales. The Bitcoin Standard sirve para recordarnos algo igual de cierto y que a menudo tambi茅n se nos olvida: la importancia de tener un 鈥渂uen dinero鈥� para el correcto funcionamiento del sistema de precios, el aumento de las posibilidades de especializaci贸n e intercambio, y para incentivar el ahorro y la planificaci贸n a largo plazo.
Y es que este es un libro m谩s sobre historia del dinero y el impacto de distintos patrones monetarios en la econom铆a real que sobre Bitcoin, al que solo dedica los tres 煤ltimos cap铆tulos (Ch.8 鈥� Digital Money; Ch.9 鈥� What is Bitcoin Good For?; Ch. 10 鈥� Bitcoin FAQ).
Los 4 primeros cap铆tulos son un fant谩stico repaso de los distintos bienes que han actuado como dinero a lo largo de la historia y un resumen de c贸mo ha cambiado el consenso econ贸mico respecto a cu谩l es la pol铆tica monetaria ideal. Los cap铆tulos 5 鈥� 7 son una introducci贸n a la teor铆a austriaca de econom铆a pero con una postura demasiado 鈥渙ne-sided鈥� en favor de esta y contra el keynesianismo y monetarismo (que teor铆as acertadas o no, tienen mejores argumentos para defender su pol铆tica monetaria ideal que las que se exponen en el libro). Adem谩s, en esta parte se introduce un fuerte componente ideol贸gico libertario y el autor se va por las ramas opinando sobre temas como el arte contempor谩neo o la vida de Keynes, que son claros 鈥渙ff-topics鈥�.
Los cap铆tulos sobre Bitcoin son b谩sicos en cuanto a la tecnolog铆a criptogr谩fica que lo soporta, pero creo que explican muy bien por qu茅 sus propiedades son ideales para convertirse, en el mejor de los casos, en la base de un patr贸n monetario alternativo que sustituya al actual, o al menos en un activo muy atractivo para actuar como dep贸sito de valor durante las pr贸ximas d茅cadas.
Leyendo The Bitcoin Standard me he dado cuenta de que para entender Bitcoin no es tan importante ser un experto en su tecnolog铆a como entender bien que caracter铆sticas ha de tener un buen activo monetario y el impacto de este en la econom铆a real. Creo que a pesar de los desvar铆os ideol贸gicos y la posici贸n austriaca radical del autor, el libro cumple bien con este objetivo, y aunque me hubiese gustado que tocara la parte t茅cnica un poco m谩s en profundidad, creo que en conjunto es un 4/5.
Y es que este es un libro m谩s sobre historia del dinero y el impacto de distintos patrones monetarios en la econom铆a real que sobre Bitcoin, al que solo dedica los tres 煤ltimos cap铆tulos (Ch.8 鈥� Digital Money; Ch.9 鈥� What is Bitcoin Good For?; Ch. 10 鈥� Bitcoin FAQ).
Los 4 primeros cap铆tulos son un fant谩stico repaso de los distintos bienes que han actuado como dinero a lo largo de la historia y un resumen de c贸mo ha cambiado el consenso econ贸mico respecto a cu谩l es la pol铆tica monetaria ideal. Los cap铆tulos 5 鈥� 7 son una introducci贸n a la teor铆a austriaca de econom铆a pero con una postura demasiado 鈥渙ne-sided鈥� en favor de esta y contra el keynesianismo y monetarismo (que teor铆as acertadas o no, tienen mejores argumentos para defender su pol铆tica monetaria ideal que las que se exponen en el libro). Adem谩s, en esta parte se introduce un fuerte componente ideol贸gico libertario y el autor se va por las ramas opinando sobre temas como el arte contempor谩neo o la vida de Keynes, que son claros 鈥渙ff-topics鈥�.
Los cap铆tulos sobre Bitcoin son b谩sicos en cuanto a la tecnolog铆a criptogr谩fica que lo soporta, pero creo que explican muy bien por qu茅 sus propiedades son ideales para convertirse, en el mejor de los casos, en la base de un patr贸n monetario alternativo que sustituya al actual, o al menos en un activo muy atractivo para actuar como dep贸sito de valor durante las pr贸ximas d茅cadas.
Leyendo The Bitcoin Standard me he dado cuenta de que para entender Bitcoin no es tan importante ser un experto en su tecnolog铆a como entender bien que caracter铆sticas ha de tener un buen activo monetario y el impacto de este en la econom铆a real. Creo que a pesar de los desvar铆os ideol贸gicos y la posici贸n austriaca radical del autor, el libro cumple bien con este objetivo, y aunque me hubiese gustado que tocara la parte t茅cnica un poco m谩s en profundidad, creo que en conjunto es un 4/5.
March 29, 2021
喔勦福喔� 喔堗笟喔椸傅喙堗箑喔斷傅喔⑧抚喔赋喔福喔编笟喔勦赋喔栢覆喔∴抚喙堗覆 "喔氞复喔曕竸喔涪喔權箤喔勦阜喔腑喔班箘喔�" 喙€喔炧福喔侧赴喔勦赋喔栢覆喔∴釜喔编箟喔權箒喔曕箞喔曕箟喔竾喔曕腑喔氞涪喔侧抚 喔⑧覆喔о箒喔氞笟喔⑧覆喔о浮喔侧竵喙� (喔佮箛喔曕腑喔氞箘喔斷箟喙€喔涏箛喔權斧喔權副喔囙釜喔粪腑喔傅喔佮斧喔ム覆喔⑧箑喔ム箞喔�) 喙€喔炧福喔侧赴喔佮覆喔｀笀喔班箑喔傕箟喔侧箖喔堗抚喙堗覆喔氞复喔曕竸喔涪喙屶竸喔粪腑喔赴喙勦福 喔曕箟喔竾喔椸赋喔勦抚喔侧浮喙€喔傕箟喔侧箖喔堗抚喙堗覆 喙€喔囙复喔權箑喔熰傅喔⑧笗喔勦阜喔腑喔班箘喔� 喔堗赴喙€喔傕箟喔侧抚喙堗覆喙€喔囙复喔權箑喔熰傅喔⑧笗喔勦阜喔腑喔班箘喔� 喔佮箛喔曕箟喔竾喔斷腹喔涏福喔班抚喔编笗喔脆辅喔侧釜喔曕福喙屶竵喔侧福喙€喔囙复喔權笢喙堗覆喔權釜喔侧涪喔曕覆喔權副喔佮箑喔ㄠ福喔┼笎喔ㄠ覆喔笗喔｀箤
喙€喔ム箞喔∴笝喔掂箟喔笜喔脆笟喔侧涪喙€喔傕箟喔侧箖喔堗竾喙堗覆喔⑧浮喔侧竵喙� 喙佮弗喔班笗喔笟喔傅喔佮斧喔ム覆喔⑧竸喔赤笘喔侧浮喔傕箟喔竾喙冟笀喙€喔娻箞喔� "喔氞弗喙囙腑喔勦箑喔娻笝喔勦阜喔腑喔班箘喔�" (喙佮笟喔氞釜喔编箟喔權箚) "altcoin喔勦阜喔腑喔班箘喔�" (喙佮笟喔氞釜喔编箟喔權箚) 喙佮弗喔� "喔堗赴喔椸赋喔ム覆喔⑧笟喔脆笗喔勦腑喔⑧笝喙屶箘喔斷箟喔涪喙堗覆喔囙箘喔�" (喔⑧覆喔о斧喔權箞喔涪)
喙佮笝喔班笝喔赤浮喔侧竵 喔覆喔佮箘喔∴箞喔笝喙冟笀喙€喔椸竸喙傕笝喙傕弗喔⑧傅喔佮覆喔｀箑喔囙复喔� 喙€喔ム箞喔∴笝喔掂箟喔佮箛喔氞腑喔佮箑喔ム箞喔侧笡喔｀赴喔о副喔曕复喔ㄠ覆喔笗喔｀箤喔佮覆喔｀箑喔囙复喔權箘喔斷箟喔涪喙堗覆喔囙釜喔權父喔佮笚喔掂箑喔斷傅喔⑧抚喔勦箞喔�
喙佮笗喙堗競喙夃腑喙€喔傅喔⑧競喔竾喙€喔ム箞喔∴笝喔掂箟 喙傕笖喔⑧釜喙堗抚喔權笗喔编抚喙佮弗喙夃抚喔о箞喔侧箑喔傕箟喔侧箖喔堗涪喔侧竵喔笝喙堗腑喔⑧箑喔炧福喔侧赴喔∴傅喔ㄠ副喔炧笚喙屶箑喔夃笧喔侧赴喙€喔⑧腑喔� 喙佮弗喔班笧喔灌笖喔栢付喔囙笚喔む俯喔庎傅喔椸覆喔囙箑喔ㄠ福喔┼笎喔ㄠ覆喔笗喔｀箤喔涪喔侧竾喙€喔勦笝喙€喔娻傅喔⑧笝喙佮弗喔班腑喔釜喙€喔曕福喔掂涪喔權竸喙堗腑喔權競喙夃覆喔囙箑喔⑧腑喔� 喔栢箟喔侧浮喔掂笧喔粪箟喔權浮喔侧斧喔權箞喔涪喔堗赴喔箞喔侧笝喔笝喔膏竵喔傕付喙夃笝 喙佮笗喙堗笘喙夃覆喙勦浮喙堗浮喔掂箑喔ム涪喔佮箛喔⑧副喔囙腑喙堗覆喔權箘喔斷箟喔勦箞喔班箑喔炧福喔侧赴喙冟笝喙€喔ム箞喔∴竵喙囙箑喔浮喔粪腑喔權笡喔灌笧喔粪箟喔權箖喔浮喙堗箖喔箟喙€喔ム涪 喔箞喔侧箚
喔涏弗. 喙佮笡喔ム箘喔椸涪喔堗赴喔∴傅喙€喔｀箛喔о箚喔權傅喙夃笝喔班竸喔� 喔笖喔椸笝喔｀腑喔傅喔佮笝喔脆笖
喙€喔ム箞喔∴笝喔掂箟喔笜喔脆笟喔侧涪喙€喔傕箟喔侧箖喔堗竾喙堗覆喔⑧浮喔侧竵喙� 喙佮弗喔班笗喔笟喔傅喔佮斧喔ム覆喔⑧竸喔赤笘喔侧浮喔傕箟喔竾喙冟笀喙€喔娻箞喔� "喔氞弗喙囙腑喔勦箑喔娻笝喔勦阜喔腑喔班箘喔�" (喙佮笟喔氞釜喔编箟喔權箚) "altcoin喔勦阜喔腑喔班箘喔�" (喙佮笟喔氞釜喔编箟喔權箚) 喙佮弗喔� "喔堗赴喔椸赋喔ム覆喔⑧笟喔脆笗喔勦腑喔⑧笝喙屶箘喔斷箟喔涪喙堗覆喔囙箘喔�" (喔⑧覆喔о斧喔權箞喔涪)
喙佮笝喔班笝喔赤浮喔侧竵 喔覆喔佮箘喔∴箞喔笝喙冟笀喙€喔椸竸喙傕笝喙傕弗喔⑧傅喔佮覆喔｀箑喔囙复喔� 喙€喔ム箞喔∴笝喔掂箟喔佮箛喔氞腑喔佮箑喔ム箞喔侧笡喔｀赴喔о副喔曕复喔ㄠ覆喔笗喔｀箤喔佮覆喔｀箑喔囙复喔權箘喔斷箟喔涪喙堗覆喔囙釜喔權父喔佮笚喔掂箑喔斷傅喔⑧抚喔勦箞喔�
喙佮笗喙堗競喙夃腑喙€喔傅喔⑧競喔竾喙€喔ム箞喔∴笝喔掂箟 喙傕笖喔⑧釜喙堗抚喔權笗喔编抚喙佮弗喙夃抚喔о箞喔侧箑喔傕箟喔侧箖喔堗涪喔侧竵喔笝喙堗腑喔⑧箑喔炧福喔侧赴喔∴傅喔ㄠ副喔炧笚喙屶箑喔夃笧喔侧赴喙€喔⑧腑喔� 喙佮弗喔班笧喔灌笖喔栢付喔囙笚喔む俯喔庎傅喔椸覆喔囙箑喔ㄠ福喔┼笎喔ㄠ覆喔笗喔｀箤喔涪喔侧竾喙€喔勦笝喙€喔娻傅喔⑧笝喙佮弗喔班腑喔釜喙€喔曕福喔掂涪喔權竸喙堗腑喔權競喙夃覆喔囙箑喔⑧腑喔� 喔栢箟喔侧浮喔掂笧喔粪箟喔權浮喔侧斧喔權箞喔涪喔堗赴喔箞喔侧笝喔笝喔膏竵喔傕付喙夃笝 喙佮笗喙堗笘喙夃覆喙勦浮喙堗浮喔掂箑喔ム涪喔佮箛喔⑧副喔囙腑喙堗覆喔權箘喔斷箟喔勦箞喔班箑喔炧福喔侧赴喙冟笝喙€喔ム箞喔∴竵喙囙箑喔浮喔粪腑喔權笡喔灌笧喔粪箟喔權箖喔浮喙堗箖喔箟喙€喔ム涪 喔箞喔侧箚
喔涏弗. 喙佮笡喔ム箘喔椸涪喔堗赴喔∴傅喙€喔｀箛喔о箚喔權傅喙夃笝喔班竸喔� 喔笖喔椸笝喔｀腑喔傅喔佮笝喔脆笖
June 8, 2020
Really terrible. I thought this book would give some technical information on bitcoin, but instead gave me some libertarians shitty views on whatever it seemed like he was thinking about at the moment he was writing. His take on Modern art was among the most memorably idiotic parts of this publication. What it did say about bitcoin was basic knowledge I could have found on Wikipedia, and even that was barely touched and poorly written.
90% of the book wasn鈥檛 worth reading in my opinion
90% of the book wasn鈥檛 worth reading in my opinion
March 3, 2018
A well put together monetary economic history from an Austrian economics perspective. Despite the large uncertainty posed by the future, Saif holds strong and clear perspectives about the future of money and the cryptocurrency space. Many would find his perspectives controversial and potentially a little dogmatic. I do, however, appreciate his clarity of thought and his unwavering commitment to his views. Whatever the eventual outcome of the cryptocurrency revolution, Saif's contribution is a valuable one. He provides a clear explanation of concepts like time-preference, sound money, inflation and the importance of capital accumulation, which are often so badly understood, even by economists. Saif offers a compelling case for bitcoin as a tool that could cause a positive societal shift due to the challenge it poses to fiat currencies. Fiat has arguably caused extremely negative societal shifts over the past 50 years due to the rampant monetary inflation they allow central banks to create - the consequences of which are rarely investigated outside of the Austrian school of economics. Saif sees bitcoin as the sound money of the information age and uncompromisingly argues against the need to drastically scale bitcoin because he holds the decentralised, immutable nature of bitcoin's sound monetary policy so dear. Well worth a read, particularly for those who don't fully appreciate the importance of sound money
April 29, 2018
The best book on Bitcoin and the existing state of the world economy that I know. After almost daily reading/following the bitcoin space, this was the book I waited for. Covers gold, history of money, economics, central banking, all before Saifedean dives into Bitcoin and why it鈥檚 unique and has no equal. This will be my standard recommendation to anybody interested in Bitcoin or the crypto space in general.
September 1, 2019
For me, one of the most important books I ever read. I have been following Bitcoin for many years and I am still amazed how well this puts Bitcoin in a historic perspective and explains it huge potential. This is a future classic.
June 20, 2021
I fell down the rabbit hole. I'd had it talked at me for months by colleagues during the 2020 bull run and had been in a position to stock some money in various places (full disclosure I have financial exposure to digital assets now among other investments). Turns out putting some money in it cranks up the research incentive exponentially over my already aggressive bookish baseline. Also turns out that this space is raising a lot of questions that are fascinating to consider in and of themselves independent of whether or not you think bitcoin is worth anything as an asset or as a concept.
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.
Further, decentralization is incredibly appealing for the grassroots power it brings to people. That's politically neutral. It's facilitative and enabling for whatever end. Where I disagree with libertarianism is in the social aspect. None of us live in a vacuum and history is relevant. We aren't all fungible nodes in a network. Humans are unique and individual which will involve prejudices that lead to historical injustices involving economic disparities NOT simply accounted for by the market. Societies are rather complex on the macro it turns out.
But in the digital space the node concept works. Considering one equal to another becomes possible when you can't see faces and the potential for natural human bias is eliminated. You can see where this can take us as far as rabbits and holes. Decentralization as a concept opens up many many ideas and is one fundamental disagreement I have with the author who claims that this technology is only good for cash. I think cash will be foundational but we're already seeing a lot of uses he hadn't even thought of 3 years ago. Universal decentralized global forms of ID, social media and streaming are a few examples currently. Not to mention NFTs but I need to study that more. I'm not on board yet.
There's a lot of technical disagreements I have with the author which I won't get into right now and the reviews of many others considering the three sections is spot on. Particularly the middle, the idea of the gold standard's elimination killing art, literature, innovation, etc, etc was laughable. You want to tell this music nerd that the entire 20th century was shit because we came off the gold standard? What does that even mean? And that no great (unique) technological innovations happened after 1913? HAHAHA!
Spend enough time looking at "the crypto space" and you'll see a microcosm of human society like any other area. There's the charlatans and cringe worthy (have a look at some of the cult speeches at the Miami conference) but that shouldn't discount the technology...which is sound. I suppose the first question is - will digital currency be around in some form? Seems silly to say no. Now how does that look for you or me? As a speculative investment is one thing, using one on a daily basis in the coming years is another and further, using the apps and industries that spring up around it. Governments will have their version, China already does and 80 countries are working on it. Digital currencies and blockchain mean highly trackable. Not necessarily tied to names but that transaction history is there. In the case of government coins they can access whatever they want. Keep in mind this is a substitute for actual cash. This isn't simply online banking. Does that feel slightly chilly? There's alternatives for all this too but that's another write up. Yet I wish I'd been more aware when living in the Middle East. I could've put my ridiculously expensive 5 day wires into the form of a USD stablecoin and sent them in a couple minutes for pennies.
I'm undecided and cautious on the long term value of this whole thing and how society will value it, adopt it, etc. Digital currency will be around but how that looks exactly is presumptuous for anyone to say and starts to sound cultish the more dogmatic one becomes. This book has elements of that. Things evolve, 2.0 happens, problems arise, ideas flash that you can't imagine. I'm under no illusions from an investment perspective that "it will always go up eventually". It's still fundamentally tied to value outside of the sphere because (shocker) that's where 99% of the monetary value is in the current world. You can deny that all you want and yes someday it might be a hedge against inflation but we're not there yet and at the moment of writing we might just well be in the biggest everything bubble in history. But that's separate from thinking about the effects of decentralization generally and the new opportunities it presents. That's where I have to pull myself away from the blogs and videos...
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.
Further, decentralization is incredibly appealing for the grassroots power it brings to people. That's politically neutral. It's facilitative and enabling for whatever end. Where I disagree with libertarianism is in the social aspect. None of us live in a vacuum and history is relevant. We aren't all fungible nodes in a network. Humans are unique and individual which will involve prejudices that lead to historical injustices involving economic disparities NOT simply accounted for by the market. Societies are rather complex on the macro it turns out.
But in the digital space the node concept works. Considering one equal to another becomes possible when you can't see faces and the potential for natural human bias is eliminated. You can see where this can take us as far as rabbits and holes. Decentralization as a concept opens up many many ideas and is one fundamental disagreement I have with the author who claims that this technology is only good for cash. I think cash will be foundational but we're already seeing a lot of uses he hadn't even thought of 3 years ago. Universal decentralized global forms of ID, social media and streaming are a few examples currently. Not to mention NFTs but I need to study that more. I'm not on board yet.
There's a lot of technical disagreements I have with the author which I won't get into right now and the reviews of many others considering the three sections is spot on. Particularly the middle, the idea of the gold standard's elimination killing art, literature, innovation, etc, etc was laughable. You want to tell this music nerd that the entire 20th century was shit because we came off the gold standard? What does that even mean? And that no great (unique) technological innovations happened after 1913? HAHAHA!
Spend enough time looking at "the crypto space" and you'll see a microcosm of human society like any other area. There's the charlatans and cringe worthy (have a look at some of the cult speeches at the Miami conference) but that shouldn't discount the technology...which is sound. I suppose the first question is - will digital currency be around in some form? Seems silly to say no. Now how does that look for you or me? As a speculative investment is one thing, using one on a daily basis in the coming years is another and further, using the apps and industries that spring up around it. Governments will have their version, China already does and 80 countries are working on it. Digital currencies and blockchain mean highly trackable. Not necessarily tied to names but that transaction history is there. In the case of government coins they can access whatever they want. Keep in mind this is a substitute for actual cash. This isn't simply online banking. Does that feel slightly chilly? There's alternatives for all this too but that's another write up. Yet I wish I'd been more aware when living in the Middle East. I could've put my ridiculously expensive 5 day wires into the form of a USD stablecoin and sent them in a couple minutes for pennies.
I'm undecided and cautious on the long term value of this whole thing and how society will value it, adopt it, etc. Digital currency will be around but how that looks exactly is presumptuous for anyone to say and starts to sound cultish the more dogmatic one becomes. This book has elements of that. Things evolve, 2.0 happens, problems arise, ideas flash that you can't imagine. I'm under no illusions from an investment perspective that "it will always go up eventually". It's still fundamentally tied to value outside of the sphere because (shocker) that's where 99% of the monetary value is in the current world. You can deny that all you want and yes someday it might be a hedge against inflation but we're not there yet and at the moment of writing we might just well be in the biggest everything bubble in history. But that's separate from thinking about the effects of decentralization generally and the new opportunities it presents. That's where I have to pull myself away from the blogs and videos...
September 24, 2021
This is a laugh out loud book. I am sure it is meant to be deadly serious. Being curious, I tried tried to find out about him but, barring his book, his self-publicising website and his assistant professorship at the American University in Lebanon, there doesn't seem to be much. However, he is clearly of the Viennese school of Economics where the break from the Gold Standard and the invention of fiat currency and Keynsean economics was the end of the world as they knew it, until the arrival of Bitcoin. Bitcoin is going to save us all, simply because it cuts out the middle man (i.e. the banks and/or the government) and cannot be adulterated. He outlines the history of money in terms of it being something valuable that cannot easily be generated and therefore does not lose its value (e.g. rai stones, cowrie shells, glass beads and gold) until a way of overproducing them is foun. He equates this with the mathematical exertions of endless PCs in generating bitcoin. There is a maximum amount of gold that can be mined and the number of bitcoin is finite - once there are 21 million of them, there can be no more. So for governments to function according to his rules there should be no ability to print money to dig them out of whatever whole they are in. No wonder when Keynes said it was fine to print money to pay for what you couldn't afford the USA and UK heaved huge sighs of relief. He uses this as an argument that wars were always short during the Gold Standard era, because it was possible that the rulers would literally run out of money - tell that to all those who suffered and died in the Thirty Years War!
This book is a polemic and that is what makes it so funny. His views on Keynes are increasingly scatologial, starting from his being born with a silver spoon in his mouth and not really being an economist at all to JMK being a pederast trawling the brothels of Europe in his spare time. I hope that he has enough evidence for this to keep lawyers at bay. He has no time for modern art or music - it doesn't take enough time to produce and therefore can have no value. He doesn't appear to believe in increasing scarcity of resources based on the human race despoiling the planet, calling people like George Monbiot "hysterics".
What he doesn't do (and this is what I had hoped to get out of this book) is explain why Bitcoin has any financial value in the real world. Sure, it obeys many of the rules of Viennese Economics in terms of the increasing difficulty of mining the last 2.5 million but once they are all mined, so what? How and by whom was it decided that something that is a mathematical exercise accomplished by electronic machines, using increasingly large resources, can actually be used to buy something? If I offered to pay for my groceries, a car, a house with bitcoin I would be told to go away (or worse) and come back with a recognised fiat currency. And yet this piece of electronic flummery (my opinon) has an exchange rate today of 30 684 GBP to one. How can something have financial value if you cannot do anything but hoard it? This seems to be the approach of the man who received only one talent in the parable.
Look, if you are a Viennese Economist then the world has gone to hell in a handcart since the Gold Standard was broken and you would also want to make sure that Guthenberg was never born so those nasty governments could never print fiat money. Books that are handwritten on vellum are inherently more valuable because of the time required to make them and global literacy can go hang. I am pretty sure that Economics is one of those subjects that is a self fulfilling prophecy and, personally, see less and less evidence of economists having any influence over money supply no matter what school they come from. To justify their existance they have to pretend that they can.
But if you want to read, or listen to, laugh inducing vitriol then this is a book you must acquire.
This book is a polemic and that is what makes it so funny. His views on Keynes are increasingly scatologial, starting from his being born with a silver spoon in his mouth and not really being an economist at all to JMK being a pederast trawling the brothels of Europe in his spare time. I hope that he has enough evidence for this to keep lawyers at bay. He has no time for modern art or music - it doesn't take enough time to produce and therefore can have no value. He doesn't appear to believe in increasing scarcity of resources based on the human race despoiling the planet, calling people like George Monbiot "hysterics".
What he doesn't do (and this is what I had hoped to get out of this book) is explain why Bitcoin has any financial value in the real world. Sure, it obeys many of the rules of Viennese Economics in terms of the increasing difficulty of mining the last 2.5 million but once they are all mined, so what? How and by whom was it decided that something that is a mathematical exercise accomplished by electronic machines, using increasingly large resources, can actually be used to buy something? If I offered to pay for my groceries, a car, a house with bitcoin I would be told to go away (or worse) and come back with a recognised fiat currency. And yet this piece of electronic flummery (my opinon) has an exchange rate today of 30 684 GBP to one. How can something have financial value if you cannot do anything but hoard it? This seems to be the approach of the man who received only one talent in the parable.
Look, if you are a Viennese Economist then the world has gone to hell in a handcart since the Gold Standard was broken and you would also want to make sure that Guthenberg was never born so those nasty governments could never print fiat money. Books that are handwritten on vellum are inherently more valuable because of the time required to make them and global literacy can go hang. I am pretty sure that Economics is one of those subjects that is a self fulfilling prophecy and, personally, see less and less evidence of economists having any influence over money supply no matter what school they come from. To justify their existance they have to pretend that they can.
But if you want to read, or listen to, laugh inducing vitriol then this is a book you must acquire.
May 14, 2022
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喔佮覆喔｀笚喔掂箞喙€喔權阜喙夃腑喔覆喔箞喔о笝喙冟斧喔嵿箞喔椸傅喙堗浮喔侧笀喔侧竵喔竾喔勦箤喔腑喔�(喔嬥付喙堗竾喔ム箞喔箘喔涏竸喔｀付喙堗竾喙€喔ム箞喔�) 喙€喔涏箛喔權箒喔勦箞喔佮覆喔｀箑喔權箟喔權涪喙夃赋喔嬥箟喔赤箚喔о箞喔侧箑喔囙复喔權笜喔權笟喔编笗喔｀笚喔掂箞喙€喔｀覆喙冟笂喙夃腑喔⑧腹喙堗浮喔编笝喙佮涪喙堗笝喔灌箟喔權笝喔掂箟 喔椸赋喙冟斧喙夃斧喔權副喔囙釜喔粪腑喙€喔｀阜喙堗腑喔囙笝喔掂箟喔涪喔侧竵喔堗赴喔ム竾喔｀覆喔⑧弗喔班箑喔傅喔⑧笖喔佮副喔氞竵喔侧福喔佮福喔班笚喔粪笟喔曕副喔о福喔班笟喔氞笜喔權笟喔编笗喔｀浮喔侧竵喔佮抚喙堗覆喔堗赴喔炧腹喔斷笘喔多竾bitcoin喙€喔傅喔⑧腑喔掂竵
喔竾喔勦箤喔父喔斷笚喙夃覆喔⑧竸喔粪腑喔复喙堗竾喔椸傅喙堗竸喔о福喔堗赴喔涏福喔侧竵喔忇笗喔编箟喔囙箒喔曕箞喔氞笚喔佮弗喔侧竾喙嗋競喔竾喙€喔｀阜喙堗腑喔� 喔嬥付喙堗竾喔佮箛喔勦阜喔� 鈥渂itcoin 喔∴副喔權竸喔粪腑喔赴喙勦福鈥�
喙傕斧喙勦腑喔箞喔� 喔∴付喔囙竵喙囙箑喔ム箞喔侧笝喔侧笝喙€喔佮复喙夃笝喔佮抚喙堗覆喔堗赴喙€喔傕箟喔侧箑喔｀阜喙堗腑喔� 喔涏福喔班箑喔斷箛喔權笚喔掂箞喔副喔∴笢喔编釜喙勦笖喙夃笂喔编笖喙嗋箑喔ム涪喔勦阜喔笗喔编抚bitcoin喔∴副喔權笩喔编竾喔斷腹喔斷傅喔堗福喔脆竾喙� 喔∴副喔權釜喔侧浮喔侧福喔栢笚喔掂箞喔堗赴喔涏笍喔脆抚喔编笗喔脆釜喔佮父喔ム箑喔囙复喔權笗喙堗覆喔囙箚喔椸傅喙堗箑喔勦涪喙€喔佮复喔斷浮喔侧箘喔斷箟喔椸副喔權笚喔�(喔｀覆喔⑧弗喔班箑喔傅喔⑧笖喙€喔娻复喔嵿笗喔赤箑喔覆喙€喔竾) 喔栢付喔囙箒喔∴箟喔о箞喔侧笀喔班浮喔掂競喙夃腑喙€喔傅喔� 喙佮笗喙堗笧喔灌笖喙€喔傕傅喔⑧笝喔佮箛喙€喔曕箛喔∴箖喔堗笚喔掂箞喔堗赴喔涪喔脆笟喔∴覆喔炧腹喔斷箖喔箟喔熰副喔囙箘喔∴箞喔∴覆喔佮竵喙囙笝喙夃腑喔�
喙佮笗喙堗競喙夃腑喙€喔傅喔⑧釜喙堗抚喔權斧喔權付喙堗竾喔勦阜喔� 喔曕副喔о笢喔灌箟喙€喔傕傅喔⑧笝喙佮笚喔氞笀喔班箖喔箟喙€喔о弗喔侧竵喔编笟喔佮覆喔｀笡喔灌笧喔粪箟喔權笎喔侧笝喔｀赴喔氞笟cypto喔權箟喔涪喔娻复喔氞笟喔氞笟喔氞斧喔侧涪 喔｀腹喙夃笝喔班抚喙堗覆喔權傅喙夃竸喔粪腑bitcoin 喙佮笗喙堗笧喔掂箞喔炧腹喔斷笘喔多竾喔｀赴喔氞笟喔犩覆喔炧福喔о浮喙€喔⑧腑喔班箚喔笝喙堗腑喔⑧竵喙囙笖喔掂笧喔掂箟
喙傕笖喔⑧福喔о浮喔笝喔编竾喔阜喔箑喔｀阜喙堗腑喔囙笝喔掂箟喔覆喔∴覆喔｀笘喔⑧箞喔權箖喔箟喙€喔弗喔粪腑200-300喔笝喙夃覆喙勦笖喙夃釜喔氞覆喔� 喔栢箟喔侧竸喔權箑喔傕傅喔⑧笝喔曕副喙夃竾喙冟笀喔堗赴喙傕笩喔佮副喔竵喔编笟喙佮竸喙堗笗喔编抚bitcoin喔∴覆喔佮竵喔о箞喔侧竵喔侧福喔權副喙堗竾喔斷箞喔侧箑喔囙复喔權箑喔熰傅喔⑧笗喙勦笡喔勦福喔多箞喔囙箑喔ム箞喔� 喔栢覆喔∴抚喙堗覆喔勦抚喔｀竸喙堗覆喙佮竵喙堗竵喔侧福喔箞喔侧笝喙勦斧喔�? 喙勦笡喔權副喙堗竾喔箞喔侧笝喔氞笚喔勦抚喔侧浮喔福喔粪腑喔斷腹喔勦弗喔脆笡喙冟笝youtube喔權箞喔侧笀喔班竵喔｀赴喔娻副喔氞箒喔ム赴喔ム赴喙€喔傅喔⑧笖喔佮抚喙堗覆喙€喔⑧腑喔班赴喔班赴
喙冟斧喙�2喔斷覆喔о箑喔炧福喔侧赴喔箞喔о笝喙佮福喔佮競喔竾喔笝喔编竾喔阜喔笖喔掂箑喔о腑喔｀箤喔勦福喔编笟 喔涏福喔班笚喔编笟喔堗覆喔�
March 4, 2021
This is an entertaining polemic on behalf of the Austrian School economists and against Keynesianism, with the tweak only coming at the end that Bitcoin offers a way to return to a world before money was delinked from gold and began its inflationary spiral. I hardly feel qualified to evaluate these arguments as a layperson but Ammous offers food for thought about how the type of money that a society uses tends to prefigure all of its values. Inflationary money that loses value with time incentivizes high time-preference behavior and thus superficiality, whereas money that holds its value for the long term and cannot be inflated (lets say gold, or bitcoin) leads people to think in terms of generations. One can see how money influences values not just in investments but in the type of culture that a society produces and the things that it places value upon 鈥� building a thousand-year cathedral seems almost incomprehensible to modern Europeans and Americans but its something that people once did. That we live in an ephemeral culture today and have even built 50-year ammortized monuments to its ephemerality is clear enough. I'm sure there are counterarguments to Ammous' pro-Austria School polemic against Keynes, but he raises interesting points regardless.
The book does not delve much into the Bitcoin protocol and its functioning but serves as a fairly good introduction to the subject. It is written with great passion and can be a bit repetitive at times, while also perhaps losing nuance in the midst of its enthusiasm for Bitcoin. That said it helped to understand more about the origins and nature of money, as well as how the way a money holds it value or not over time can totally transform society. Money is inherently political and its characteristics influence every part of the society it comes into contact with. I certainly hope that Bitcoin does live up to Ammous hopes in it.
The book does not delve much into the Bitcoin protocol and its functioning but serves as a fairly good introduction to the subject. It is written with great passion and can be a bit repetitive at times, while also perhaps losing nuance in the midst of its enthusiasm for Bitcoin. That said it helped to understand more about the origins and nature of money, as well as how the way a money holds it value or not over time can totally transform society. Money is inherently political and its characteristics influence every part of the society it comes into contact with. I certainly hope that Bitcoin does live up to Ammous hopes in it.
December 17, 2020
Really poor. It鈥檚 concerning that Wiley would release an opinion piece, and it鈥檚 equally worrying that an academic would pen something filled with so many logical oversights at best, and outright specious arguments at worst.
There are canyon-sized gaps in the presentation of the economic perspective, an odd middle section veering into ideological personal views, finally tied up with a fairly banal rundown of Bitcoin. My guess is that the positive reviews here are from people who potentially don鈥檛 have a strong background in economics or knowledge of the Austrian school of thought, and who took the assertions made here at face value?
There are canyon-sized gaps in the presentation of the economic perspective, an odd middle section veering into ideological personal views, finally tied up with a fairly banal rundown of Bitcoin. My guess is that the positive reviews here are from people who potentially don鈥檛 have a strong background in economics or knowledge of the Austrian school of thought, and who took the assertions made here at face value?
September 7, 2022
F眉r jeden, der mehr dar眉ber lernen m枚chte, wie Geld sich 眉ber die Geschichte hinweg ver盲ndert hat und wie es heute funktioniert, echt empfehlenswert. Untersucht wird auch, welchen Einfluss verschiedene W盲hrungssysteme auf die jeweiligen Nationen und deren Kultur, Kunst und Wohlstand gehabt haben. Der Autor (脰sterreichische Schule) zieht daraus volkswirtschaftliche Erkenntnisse und zeigt auf, weshalb Bitcoin die solideste W盲hrung ist, die es geben kann. Insgesamt also eher eine volkswirtschaftliche als technische Einf眉hrung in Bitcoin und definitiv keine Anlageberatung.
June 3, 2018
With all the hype in the crypto space, it鈥檚 gratifying to read a book about Bitcoin which (apart from a brief prologue) contains only incidental mention of Bitcoin for the first two-thirds of the book. Ultimately, as you鈥檒l gather from the title, Bitcoin plays a fairly grand role, supplanting gold as the historical reserve standard, but by building a groundwork understanding of money鈥檚 emergence, history, and evolution, Ammous makes a sober arrival at his final destination.
Money has traditionally had three facets: medium of exchange, store of value, and unit of account. Sound money, Ammous鈥檚 argument goes, also requires salability (鈥渢he ease with which a good can be sold on the market whenever its holder desires, with the least loss in its price鈥�) and a high stock-to-flow ratio (the ratio of existing captured supply to what鈥檚 added to it over a given time period). Much attention is devoted to the importance of a high stock-to-flow ratio with the conclusion that Bitcoin will soon have the highest stock-to-flow of any money, overtaking gold in the year 2022 and doubling gold鈥檚 in 2025.
A high stock-to-flow ratio explains why gold has been a consistent store of value for millennia and why silver has been a second-place store. Demand for money fluctuates in the same way it does for goods on the market. When demand spikes, resources are diverted to producing more of the demanded good鈥攕ince now the effort will be rewarded with a higher price. The best money maintains a high stock-to-flow ratio even through periods of high money demand. And this has precisely been the case with gold. In the past seven decades, Ammous shows, gold has averaged an annual growth rate of 1.5%, never surpassing 2% even during the highest periods of demand. Ramping up mining operations will of course on average result in some increase in gold production, but this increased supply has to be measured against relatively massive existing stockpiles, which have been accumulating for millennia free of corrosion due to gold鈥檚 chemical properties. Silver鈥檚 stockpiles, on the other hand, diminish via corrosion and higher rates of industrial consumption. At the same time silver production is more amenable than gold to increased demand, being more abundant and easier to mine and refine. All of this accumulates to an overall lower stock-to-flow ratio.
This is all antithetical to the Keynesian perspective which stipulates that governments control and manage the supply of money, stimulating during downturns when consumption flags. To sum it briefly, Ammous isn鈥檛 all that jazzed about this perspective. The book expands quite a bit on this, but the primary critique is that government control lowers money鈥檚 stock-to-flow ratio. The Keynesian program isn鈥檛 mindless continuous stimulation; at certain junctures it鈥檚 time to remove the proverbial punch bowl. Yet when these moments arrive no one seems to have the nerve to do it. Alternatively, finding ourselves in situations like the 2008 scenario where the economy doesn鈥檛 make the called for turnaround following extraordinary stimulation, Keynesian economists come to the unfalsifiable conclusion that we simply didn鈥檛 stimulate enough. There鈥檚 no proven formulation for proper magnitude of stimulation and so no credible restraint mechanism to prevent a free-floating currency from inflating鈥攚hether it鈥檚 the Keynesian 鈥渞ight time鈥� for this maneuver or not. It turns out that a money which can be 鈥渕anaged鈥� will be managed quite heavily upward; a superabundance of imagination isn鈥檛 required to conceive of some incentive to create more money given the ability.
Milton Friedman too is culpable in all this as an advocate of free-floating currencies and for overlooked causative factors in his historical analyses. But criticisms here are limited to Friedman鈥檚 professional work, while Keynes鈥檚 entire life is open to reproach. Keynes devotees will be unimpressed, but these criticisms although bitter aren鈥檛 strictly ad hominem. In Keynes Ammous diagnoses (fairly or unfairly readers can decide) personality traits which inform his entire economic philosophy. A major aspect of the book鈥檚 argument for sound money versus easy money relates to the time preferences biased by one compared to the other. A selling point for sound money is its low time preference bias, and Ammous paints Keynes as a high time preference individual who consequently advocated high time preference money. Ammous introduces the concept of time preference with the (by 2018 probably familiar to at least 80% of popular non-fiction readers or TED Talk watchers), whereby the children who eat the first marshmallow right off the bat have high time preference (immediate consumption is much more valuable to them than future consumption), whereas the children who forgo consumption in order to double their reward have a lower time preference (current consumption is only somewhat more valuable to them than future consumption, and so when future consumption entails higher payoff than present consumption, they wait).
Low time preference is more likely to prevail with monies that maintain purchasing power over time, while time preference increases with monies whose purchasing power declines. (Although 鈥渘udges鈥� would imply top down control鈥攚hich Bitcoin intrinsically deactivates鈥攊f you like thinking in these terms, sound money nudges toward lower time preference while easy money nudges toward higher time preference.)
The U.S. Federal Reserve targets a 2% inflation rate. This continuous devaluation of stored wealth is intended as a mild economic stimulant. As Ammous has it, knowledge that your wealth鈥檚 purchasing power isn鈥檛 preserved while stored in USD incents levels of risk-taking beyond what people would otherwise be disposed to if they knew their wealth was safe. The risky investments that become necessary for individuals to compensate for the drain on their wealth aggregate to systemic overcompensation. Indeed, this stimulates the economy, but the planned injection synchronizes local ups and downs into systemic oscillations of boom and recession.
When, on the other hand, wealth is preserved, people remain free to take risk but without being goaded into otherwise intolerable levels. They鈥檙e staking real wealth for the prospect of real return rather than lobbing around financial hot potatoes. Under this more Austrian specification we don鈥檛 get the systemic cyclicality of top-down injection. Planned inflation also amounts to an opaque tax鈥攁 tax that a population might be less willing to abide, for activities they might not approve of, were all this publically tabulated for clearer inspection. Although this isn鈥檛 necessarily a small government argument; funds will be allocated most optimally when all costs are most accurately accounted for whatever the size of the governing body in question. (Much more on all of this as it relates to fractional reserve banking, interest rates, and Austrian business cycle theory is outlined in the book.)
Nakamoto鈥檚 design choice of a 21 million supply cap for Bitcoin turns out to be more of a psychological anchoring point (some number had to be settled on, and scarcity but not a level of scarcity intimidating to newcomers would be a good range to shoot for with a sound money experiment) than an economic consideration. The network would function just as well with only one bitcoin so long as it were divisible to the full extent of users鈥� needs. (And here鈥檚 where Bitcoin starts to show possible superiority over gold: subdividing a block of gold is much more cumbersome than doing the same to a bitcoin.) While money supply itself is in fact inconsequential, adjusting it increases unpredictability, destroying information signals, creating distortions and bubbles, and harming what should really be protected: purchasing power. Tying back in with time preference, the idea is that if you spend your money in ten years it should purchase just as much or more as it would spending it today.
If money supply itself doesn鈥檛 matter (given adequate divisibility), resources diverted to increasing the money supply could be put to more productive use instead. The easier a money is to create, the more capital that will be unproductively diverted into increasing its supply. The sign of a good money is when intensifying efforts to create more of it is a bad investment, and Bitcoin鈥檚 difficulty adjustment ensures that more effort will not result overall in a greater number of newly minted coins, preserving holders鈥� purchasing power.
As Ammous shows, the ability to manipulate money supply is perpetually abused. It鈥檚 a lure that鈥攚hether stemming from tyrannical greed, strategic desire for obfuscation, or ill-guided good intentions鈥攄oesn鈥檛 go unheeded for long. There鈥檚 the example of coin clipping where metal clipped from around the edges of officially minted coins allowed Sovereigns to decrease the official weights of their coins in order to mint more for themselves. There鈥檙e also examples of isolated preindustrial societies whose formerly stable currencies (such as used by Yap Islanders and the at one time prevalent in west Africa) lost all value when foreign industrial-scale reproductions flooded local markets. The devastation to local wealth and purchasing power was so great in Africa that they resorted to selling their own people as slaves.
Although these industrial-preindustrial asymmetric interchanges offer disturbingly vivid accounts of monetary wreckage, they highlight the dangers of currencies that aren鈥檛 robust against supply inflation. Interestingly though, these anecdotes paint money as technology, perhaps not the first designation everybody would consider. The best form of money so far鈥攂y sound money accounts鈥攈as been gold, which certainly doesn鈥檛 seem technological. But exactly this kind of fruitful thinking is how Bitcoin鈥攏ot without its own IT ancestry鈥攁rose.
Even with its rarity and chemical stability gold has its attack vectors. It鈥檚 not easily divisible for everyday small transactions (the mythic cup of coffee). (Substituting silver or another lesser metal for everyday transacting solves this problem but opens the door to exchange swings between the two poles of a bimetallic system.) Meanwhile, gold is relatively transportable (it鈥檚 a denser store of value than, say, cattle鈥攁nother historical currency from the book), but it鈥檚 really not that convenient to carry around with you. For this reason people began storing gold in banks. The banks then began issuing paper notes to be traded in place of gold while the gold itself remained in the banks鈥� vaults. While paper notes solved the divisibility problem, the fact that the gold now remained in the banks was a new point of centralization鈥攐ne that didn鈥檛 go unnoticed by governments. It鈥檚 laid out in nice detail in the book but over the course of a few decades of the 20th century gold made its way from these dispersed local banks to the official central banks of governments, accompanying our transition from a gold standard (paper notes backed by gold) to a system of free-floating exchange. Aside from destroying people鈥檚 saved wealth this caused havoc for international trade:
But dreams of a return to a halcyon gold standard, of gold as a world reserve currency, are misguided鈥攁nd not merely due to the technological limitations. Monetary and fiscal policy are firmly established tools of government鈥攚ith plenty of additional beneficiaries. It鈥檚 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: 鈥淚 don鈥檛 believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can鈥檛 take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can鈥檛 stop.鈥�
The Bitcoin project may still fail, but if it can鈥檛 be Hayek鈥檚 sly roundabout introduction of something governments can鈥檛 stop it shouldn鈥檛 have had much value in the first place. While we鈥檙e still waiting to see if Nakamoto was sly enough to pull it off, with each passing day the network becomes more robust. Ammous invokes Nassim Taleb鈥檚 antifragility concept (and Taleb followers will be interested to know that he wrote The Bitcoin Standard鈥檚 ), citing how attacks on the network have only so far strengthened it and inoculated it through code patches against repeat attacks on any given vulnerability.
If capacity for inflation will never remain latent in a money for long, the technological aspect of money is precisely the capacity to resist this. Bitcoin removes the ability to modify supply altogether. Critically, Bitcoin鈥檚 difficulty adjustment makes it so that more resources put into mining bitcoins will not result in more bitcoins being created than planned for by the code, but instead result in making the network itself more secure and harder to attack. Greater security increases its attractiveness as a store of value, which raises the price, which increases attractiveness to mine bitcoin, which increases network security, and so on.
The protocol鈥檚 predictability promises to preserve as much of the information signal that travels through the monetary medium as possible. Bitcoin鈥檚 robustness, it鈥檚 resistance to modification, is achieved via mass distribution of its ledger on nodes across the world. But such extreme redundancy makes for a functionally rather inefficient system. If this is the case, why do we keep hearing so much about these days? Ammous paints the blockchain-not-Bitcoin rhetoric that鈥檚 popped up over the last few years as so much hype for doomed endeavors to wrest Bitcoin鈥檚 market and mind share over to projects which have no intention of ceding control or centralization and therefore have no use for the core value proposition of the blockchain (with its inherent inefficiency) in the first place:
Similarly, the book has little positive to say with regards to altcoins, making the case that most projects have zero grounds for their trumpeted decentralization claims:
With so much debate over blockchain project governance these days (be it on- or off-chain schemes), Ammous doesn鈥檛 seem to find much use in any of it. Bitcoin鈥檚 core value proposition is again ultimately it鈥檚 resistance to modification. It鈥檇 only undermine confidence in the currency as a store of value if it could be modified willy-nilly. Ammous posits it as a virtue that the upgrade process is slow and that persuading various factions of the merit of network upgrades isn鈥檛 something that happens overnight. It鈥檚 a strength of the network that there鈥檚 debate at every step of the process. So in this model, while Bitcoin isn鈥檛 likely yet in its final form, it鈥檚 not far from it. There鈥檒l be some efficiency upgrades, but so resistant to modification is the protocol that we鈥檙e not likely to see any wild boosts to on-chain capacity (this dovetailing additionally with the assessment that protocol-level scaling increases centralization pressures).
And so getting back to the Bitcoin standard of the title, Ammous envisions (unlike some of Bitcoin鈥檚 earliest adopter who foresee Wall Street in nothing but rubble in Bitcoin鈥檚 wake) a return to a system of banking similar in style to that of the gold standard heydays but with Bitcoin taking over as reserve currency. In a system of sound money banking,
[Review continued in comments...]
Money has traditionally had three facets: medium of exchange, store of value, and unit of account. Sound money, Ammous鈥檚 argument goes, also requires salability (鈥渢he ease with which a good can be sold on the market whenever its holder desires, with the least loss in its price鈥�) and a high stock-to-flow ratio (the ratio of existing captured supply to what鈥檚 added to it over a given time period). Much attention is devoted to the importance of a high stock-to-flow ratio with the conclusion that Bitcoin will soon have the highest stock-to-flow of any money, overtaking gold in the year 2022 and doubling gold鈥檚 in 2025.
A high stock-to-flow ratio explains why gold has been a consistent store of value for millennia and why silver has been a second-place store. Demand for money fluctuates in the same way it does for goods on the market. When demand spikes, resources are diverted to producing more of the demanded good鈥攕ince now the effort will be rewarded with a higher price. The best money maintains a high stock-to-flow ratio even through periods of high money demand. And this has precisely been the case with gold. In the past seven decades, Ammous shows, gold has averaged an annual growth rate of 1.5%, never surpassing 2% even during the highest periods of demand. Ramping up mining operations will of course on average result in some increase in gold production, but this increased supply has to be measured against relatively massive existing stockpiles, which have been accumulating for millennia free of corrosion due to gold鈥檚 chemical properties. Silver鈥檚 stockpiles, on the other hand, diminish via corrosion and higher rates of industrial consumption. At the same time silver production is more amenable than gold to increased demand, being more abundant and easier to mine and refine. All of this accumulates to an overall lower stock-to-flow ratio.
This is all antithetical to the Keynesian perspective which stipulates that governments control and manage the supply of money, stimulating during downturns when consumption flags. To sum it briefly, Ammous isn鈥檛 all that jazzed about this perspective. The book expands quite a bit on this, but the primary critique is that government control lowers money鈥檚 stock-to-flow ratio. The Keynesian program isn鈥檛 mindless continuous stimulation; at certain junctures it鈥檚 time to remove the proverbial punch bowl. Yet when these moments arrive no one seems to have the nerve to do it. Alternatively, finding ourselves in situations like the 2008 scenario where the economy doesn鈥檛 make the called for turnaround following extraordinary stimulation, Keynesian economists come to the unfalsifiable conclusion that we simply didn鈥檛 stimulate enough. There鈥檚 no proven formulation for proper magnitude of stimulation and so no credible restraint mechanism to prevent a free-floating currency from inflating鈥攚hether it鈥檚 the Keynesian 鈥渞ight time鈥� for this maneuver or not. It turns out that a money which can be 鈥渕anaged鈥� will be managed quite heavily upward; a superabundance of imagination isn鈥檛 required to conceive of some incentive to create more money given the ability.
Milton Friedman too is culpable in all this as an advocate of free-floating currencies and for overlooked causative factors in his historical analyses. But criticisms here are limited to Friedman鈥檚 professional work, while Keynes鈥檚 entire life is open to reproach. Keynes devotees will be unimpressed, but these criticisms although bitter aren鈥檛 strictly ad hominem. In Keynes Ammous diagnoses (fairly or unfairly readers can decide) personality traits which inform his entire economic philosophy. A major aspect of the book鈥檚 argument for sound money versus easy money relates to the time preferences biased by one compared to the other. A selling point for sound money is its low time preference bias, and Ammous paints Keynes as a high time preference individual who consequently advocated high time preference money. Ammous introduces the concept of time preference with the (by 2018 probably familiar to at least 80% of popular non-fiction readers or TED Talk watchers), whereby the children who eat the first marshmallow right off the bat have high time preference (immediate consumption is much more valuable to them than future consumption), whereas the children who forgo consumption in order to double their reward have a lower time preference (current consumption is only somewhat more valuable to them than future consumption, and so when future consumption entails higher payoff than present consumption, they wait).
Low time preference is more likely to prevail with monies that maintain purchasing power over time, while time preference increases with monies whose purchasing power declines. (Although 鈥渘udges鈥� would imply top down control鈥攚hich Bitcoin intrinsically deactivates鈥攊f you like thinking in these terms, sound money nudges toward lower time preference while easy money nudges toward higher time preference.)
If society were a little girl in that marshmallow experiment Keynesian economics seeks to alter the experiment so that waiting would punish the girl by giving her half a marshmallow instead of two, making the entire concept of self-control and low time preference appear counterproductive. Indulging immediate pleasures is the more likely course of action economically, and that will then reflect on culture and society at large. The Austrian school, on the other hand, by preaching sound money, recognizes the reality of the trade-off that nature provides humans, and that if the child waits, there will be more reward for her, making her happier in the long run, encouraging her to defer her gratification to increase it.
The U.S. Federal Reserve targets a 2% inflation rate. This continuous devaluation of stored wealth is intended as a mild economic stimulant. As Ammous has it, knowledge that your wealth鈥檚 purchasing power isn鈥檛 preserved while stored in USD incents levels of risk-taking beyond what people would otherwise be disposed to if they knew their wealth was safe. The risky investments that become necessary for individuals to compensate for the drain on their wealth aggregate to systemic overcompensation. Indeed, this stimulates the economy, but the planned injection synchronizes local ups and downs into systemic oscillations of boom and recession.
When, on the other hand, wealth is preserved, people remain free to take risk but without being goaded into otherwise intolerable levels. They鈥檙e staking real wealth for the prospect of real return rather than lobbing around financial hot potatoes. Under this more Austrian specification we don鈥檛 get the systemic cyclicality of top-down injection. Planned inflation also amounts to an opaque tax鈥攁 tax that a population might be less willing to abide, for activities they might not approve of, were all this publically tabulated for clearer inspection. Although this isn鈥檛 necessarily a small government argument; funds will be allocated most optimally when all costs are most accurately accounted for whatever the size of the governing body in question. (Much more on all of this as it relates to fractional reserve banking, interest rates, and Austrian business cycle theory is outlined in the book.)
Nakamoto鈥檚 design choice of a 21 million supply cap for Bitcoin turns out to be more of a psychological anchoring point (some number had to be settled on, and scarcity but not a level of scarcity intimidating to newcomers would be a good range to shoot for with a sound money experiment) than an economic consideration. The network would function just as well with only one bitcoin so long as it were divisible to the full extent of users鈥� needs. (And here鈥檚 where Bitcoin starts to show possible superiority over gold: subdividing a block of gold is much more cumbersome than doing the same to a bitcoin.) While money supply itself is in fact inconsequential, adjusting it increases unpredictability, destroying information signals, creating distortions and bubbles, and harming what should really be protected: purchasing power. Tying back in with time preference, the idea is that if you spend your money in ten years it should purchase just as much or more as it would spending it today.
If money supply itself doesn鈥檛 matter (given adequate divisibility), resources diverted to increasing the money supply could be put to more productive use instead. The easier a money is to create, the more capital that will be unproductively diverted into increasing its supply. The sign of a good money is when intensifying efforts to create more of it is a bad investment, and Bitcoin鈥檚 difficulty adjustment ensures that more effort will not result overall in a greater number of newly minted coins, preserving holders鈥� purchasing power.
As Ammous shows, the ability to manipulate money supply is perpetually abused. It鈥檚 a lure that鈥攚hether stemming from tyrannical greed, strategic desire for obfuscation, or ill-guided good intentions鈥攄oesn鈥檛 go unheeded for long. There鈥檚 the example of coin clipping where metal clipped from around the edges of officially minted coins allowed Sovereigns to decrease the official weights of their coins in order to mint more for themselves. There鈥檙e also examples of isolated preindustrial societies whose formerly stable currencies (such as used by Yap Islanders and the at one time prevalent in west Africa) lost all value when foreign industrial-scale reproductions flooded local markets. The devastation to local wealth and purchasing power was so great in Africa that they resorted to selling their own people as slaves.
Although these industrial-preindustrial asymmetric interchanges offer disturbingly vivid accounts of monetary wreckage, they highlight the dangers of currencies that aren鈥檛 robust against supply inflation. Interestingly though, these anecdotes paint money as technology, perhaps not the first designation everybody would consider. The best form of money so far鈥攂y sound money accounts鈥攈as been gold, which certainly doesn鈥檛 seem technological. But exactly this kind of fruitful thinking is how Bitcoin鈥攏ot without its own IT ancestry鈥攁rose.
Even with its rarity and chemical stability gold has its attack vectors. It鈥檚 not easily divisible for everyday small transactions (the mythic cup of coffee). (Substituting silver or another lesser metal for everyday transacting solves this problem but opens the door to exchange swings between the two poles of a bimetallic system.) Meanwhile, gold is relatively transportable (it鈥檚 a denser store of value than, say, cattle鈥攁nother historical currency from the book), but it鈥檚 really not that convenient to carry around with you. For this reason people began storing gold in banks. The banks then began issuing paper notes to be traded in place of gold while the gold itself remained in the banks鈥� vaults. While paper notes solved the divisibility problem, the fact that the gold now remained in the banks was a new point of centralization鈥攐ne that didn鈥檛 go unnoticed by governments. It鈥檚 laid out in nice detail in the book but over the course of a few decades of the 20th century gold made its way from these dispersed local banks to the official central banks of governments, accompanying our transition from a gold standard (paper notes backed by gold) to a system of free-floating exchange. Aside from destroying people鈥檚 saved wealth this caused havoc for international trade:
It is an astonishing fact of modern life that an entrepreneur in the year 1900 could make global economic plans and calculations all denominated in any international currency, with no thought whatsoever given to exchange rate fluctuations. A century later, the equivalent entrepreneur trying to make an economic plan across borders faces an array of highly volatile exchange rates that might make him think he has walked into a Salvador Dali painting.
But dreams of a return to a halcyon gold standard, of gold as a world reserve currency, are misguided鈥攁nd not merely due to the technological limitations. Monetary and fiscal policy are firmly established tools of government鈥攚ith plenty of additional beneficiaries. It鈥檚 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: 鈥淚 don鈥檛 believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can鈥檛 take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can鈥檛 stop.鈥�
The Bitcoin project may still fail, but if it can鈥檛 be Hayek鈥檚 sly roundabout introduction of something governments can鈥檛 stop it shouldn鈥檛 have had much value in the first place. While we鈥檙e still waiting to see if Nakamoto was sly enough to pull it off, with each passing day the network becomes more robust. Ammous invokes Nassim Taleb鈥檚 antifragility concept (and Taleb followers will be interested to know that he wrote The Bitcoin Standard鈥檚 ), citing how attacks on the network have only so far strengthened it and inoculated it through code patches against repeat attacks on any given vulnerability.
If capacity for inflation will never remain latent in a money for long, the technological aspect of money is precisely the capacity to resist this. Bitcoin removes the ability to modify supply altogether. Critically, Bitcoin鈥檚 difficulty adjustment makes it so that more resources put into mining bitcoins will not result in more bitcoins being created than planned for by the code, but instead result in making the network itself more secure and harder to attack. Greater security increases its attractiveness as a store of value, which raises the price, which increases attractiveness to mine bitcoin, which increases network security, and so on.
The protocol鈥檚 predictability promises to preserve as much of the information signal that travels through the monetary medium as possible. Bitcoin鈥檚 robustness, it鈥檚 resistance to modification, is achieved via mass distribution of its ledger on nodes across the world. But such extreme redundancy makes for a functionally rather inefficient system. If this is the case, why do we keep hearing so much about these days? Ammous paints the blockchain-not-Bitcoin rhetoric that鈥檚 popped up over the last few years as so much hype for doomed endeavors to wrest Bitcoin鈥檚 market and mind share over to projects which have no intention of ceding control or centralization and therefore have no use for the core value proposition of the blockchain (with its inherent inefficiency) in the first place:
鈥楤lockchain technology,鈥� to the extent that such a thing exists, is not an efficient or cheap or fast way of transacting online. It is actually immensely inefficient and slow compared to centralized solutions. The only advantage that it offers is eliminating the need to trust in third-party intermediation. The only possible uses of this technology are in avenues where removing third-party intermediation is of such paramount value to end users that it justifies the increased cost and lost efficiency. And the only process for which it actually can succeed in eliminating third-party intermediation is the process of moving the native token of the network itself, as the code of the blockchain has no integrated control over anything taking place outside it.
Similarly, the book has little positive to say with regards to altcoins, making the case that most projects have zero grounds for their trumpeted decentralization claims:
[V]irtually all altcoins have a team in charge; they began the project, marketed it, designed the marketing material, and plugged press releases into the press as if they were news items, while also having the advantage of mining a large number of coins early before anybody had heard of the coins. These teams are publicly known individuals, and no matter how hard they might try, they cannot demonstrate credibly that they have no control over the direction of the currency, which undermines any claims other currencies might have to being a form of digital cash that cannot be edited or controlled by any third party.
With so much debate over blockchain project governance these days (be it on- or off-chain schemes), Ammous doesn鈥檛 seem to find much use in any of it. Bitcoin鈥檚 core value proposition is again ultimately it鈥檚 resistance to modification. It鈥檇 only undermine confidence in the currency as a store of value if it could be modified willy-nilly. Ammous posits it as a virtue that the upgrade process is slow and that persuading various factions of the merit of network upgrades isn鈥檛 something that happens overnight. It鈥檚 a strength of the network that there鈥檚 debate at every step of the process. So in this model, while Bitcoin isn鈥檛 likely yet in its final form, it鈥檚 not far from it. There鈥檒l be some efficiency upgrades, but so resistant to modification is the protocol that we鈥檙e not likely to see any wild boosts to on-chain capacity (this dovetailing additionally with the assessment that protocol-level scaling increases centralization pressures).
And so getting back to the Bitcoin standard of the title, Ammous envisions (unlike some of Bitcoin鈥檚 earliest adopter who foresee Wall Street in nothing but rubble in Bitcoin鈥檚 wake) a return to a system of banking similar in style to that of the gold standard heydays but with Bitcoin taking over as reserve currency. In a system of sound money banking,
bankers perform two highly pivotal functions for economic prosperity: the safekeeping of assets as deposits, and the matching of maturity and risk tolerance between investors and investment opportunities. Bankers make their money by taking a cut from the profits if they succeed in their job, but make no profit if they fail. Only the successful bankers and banks stay in their job, as those that fail are weeded out. In a society of sound money, there are no liquidity concerns over the failure of a bank, as all banks hold all their deposits on hand, and have investments of matched maturity. In other words, there is no distinction between illiquidity and insolvency, and there is no systemic risk that could make any bank 鈥榯oo big to fail.鈥� A bank that fails is the problem of its shareholders and lenders, and nobody else.
[Review continued in comments...]
June 16, 2020
Compr茅 este libro esperando una explicaci贸n detallada de Bitcoin. Tanto a nivel t茅cnico (blockchain, critpograf铆a, etc) como funcional (uso de la moneda como medio de intercambio y refugio de valor).
Sin embargo, nada m谩s comenzar su lectura comprend铆 que su autor hab铆a dado otro enfoque totalmente diferente.
Podr铆amos decir que el libro se divide en tres partes:
1. Historia del dinero (cap铆tulos del 1 al 4)
2. Teor铆a monetaria y ciclos econ贸micos (cap铆tulos del 5 al 7)
3. Bitcoin: caracter铆sticas, virtudes y cuestiones generales (cap铆tulos del 8 al 10)
Pese a no ser lo que estaba buscando, es un libro que recomendar铆a a cualquier persona que se interese no solo en Bitcoin sino en la funci贸n y or铆genes del dinero. En este sentido, la primera parte del libro es fant谩stica.
La segunda parte toca un tema especialmente controvertido como es la teor铆a monetaria. En este sentido, el autor tiene un enfoque 100% austriaco y aborrece al m谩ximo las teor铆as keynesianas tan en boga en la actualidad.
De la tercera parte, me quedo con el cap铆tulo 9 "Para qu茅 es bueno Bitcoin" as铆 como algunas cuestiones del cap铆tulo 10.
En t茅rminos generales, un libro recomendable y de amena lectura.
Sin embargo, nada m谩s comenzar su lectura comprend铆 que su autor hab铆a dado otro enfoque totalmente diferente.
Podr铆amos decir que el libro se divide en tres partes:
1. Historia del dinero (cap铆tulos del 1 al 4)
2. Teor铆a monetaria y ciclos econ贸micos (cap铆tulos del 5 al 7)
3. Bitcoin: caracter铆sticas, virtudes y cuestiones generales (cap铆tulos del 8 al 10)
Pese a no ser lo que estaba buscando, es un libro que recomendar铆a a cualquier persona que se interese no solo en Bitcoin sino en la funci贸n y or铆genes del dinero. En este sentido, la primera parte del libro es fant谩stica.
La segunda parte toca un tema especialmente controvertido como es la teor铆a monetaria. En este sentido, el autor tiene un enfoque 100% austriaco y aborrece al m谩ximo las teor铆as keynesianas tan en boga en la actualidad.
De la tercera parte, me quedo con el cap铆tulo 9 "Para qu茅 es bueno Bitcoin" as铆 como algunas cuestiones del cap铆tulo 10.
En t茅rminos generales, un libro recomendable y de amena lectura.
Read
January 26, 2019One of the interesting side effects of the rise of Bitcoin is that suddenly a lot of people are interested in Austrian economics.
In The Bitcoin Standard, Ammous offers a take on why Bitcoin is the best version of what Austrian economists call 鈥渟ound money鈥� and why he believes that makes it the only cryptocurrency worth paying attention to.
A lot of the argument hinges on the notion of time preference鈥娾€斺€妕hat a sound money which can鈥檛 be inflated away incentives people to think longer term, a shift that would certainly be welcome.
I found the core argument here really interesting and compelling. I think understanding the Austrian view of money and Bitcoin is helpful (if not essential) for anyone in the crypto space.
In The Bitcoin Standard, Ammous offers a take on why Bitcoin is the best version of what Austrian economists call 鈥渟ound money鈥� and why he believes that makes it the only cryptocurrency worth paying attention to.
A lot of the argument hinges on the notion of time preference鈥娾€斺€妕hat a sound money which can鈥檛 be inflated away incentives people to think longer term, a shift that would certainly be welcome.
I found the core argument here really interesting and compelling. I think understanding the Austrian view of money and Bitcoin is helpful (if not essential) for anyone in the crypto space.
March 30, 2020
The only interesting thing in this book was the description of how bitcoin works and the author's arguments for why bitcoin and not other crypto-curencies would 'prevail'. Otherwise its laughably bad in very many places, a mish-mash of typical goldbug-crypto-nerd cherry picked history with overstretched claims
October 19, 2021
This is a great first book for anyone that wishes to learn about Bitcoin. A close friends dad had asked my about Bitcoin right after I finished this book and I recommend he read the Whitepaper and then this.
December 13, 2022
賰鬲丕亘 賴丕賲 噩丿丕.. 賲丨鬲賵丕賴 丕孬乇賷 賲賳 毓賳賵丕賳賴 賮賱丕 賷鬲賰賱賲 毓賳 丕賱毓賲賱丞 丕賱乇賯賲賷丞 亘卮賰賱 爻胤丨賷 賰賲毓馗賲 丕賱賰鬲丕亘丕鬲 亘賱 禺氐氐 8 賲賳 賮氐賵賱丞 丕賱毓卮乇 賱鬲賯丿賷賲 乇丐賷丞 賳賯丿賷丞 毓賲賷賯丞 賱賱丕賯鬲氐丕丿 丕賱賲毓丕氐乇 乇賰夭 賮賷賴丕 毓賱賶 丿賵乇 丕賱賳賯丿 賰賵爻賷賱丞 賱賱鬲亘丕丿賱 賵賲禺夭賳 丕賱賯賷賲丞 毓亘乇 丕賱毓氐賵乇 賵兀孬乇 匕賱賰 丕賱毓賲賷賯 噩丿丕 毓賱賶 鬲胤賵乇 丕賱賲噩鬲賲毓丕鬲
July 7, 2019
Great book. Fantastic explanation of what money is. Almost 2/3 of the book focus on the history of money: primitive money, monetary metals, government money, digital money, and Bitcoin.
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