When a pseudonymous programmer introduced “a new electronic cash system that’s fully peer-to-peer, with no trusted third party” to a small online mailing list in 2008, very few paid attention. Ten years later, and against all odds, this upstart autonomous decentralized software offers an unstoppable and globally-accessible hard money alternative to modern central banks. The Bitcoin Standard analyzes the historical context to the rise of Bitcoin, the economic properties that have allowed it to grow quickly, and it’s likely economic, political, and social implications.
While Bitcoin is a new invention of the digital age, the problem it purports to solve is as old as human society itself: Transferring value across time and space. Saifedean Ammous, the writer takes the reader on an engaging journey through the history of technologies performing the functions of money, from primitive systems of trading limestones and seashells to metals, coins, the gold standard, and modern government debt.
Ammous’ firm grasp of the technological possibilities as well as the historical realities of monetary evolution provides for a fascinating exploration of the ramifications of voluntary free market money. As it challenges the most sacred of government monopolies, Bitcoin shifts the pendulum of sovereignty away from governments in favour of individuals, offering us the tantalizing possibility of a world where money is fully extricated from politics and unrestrained by borders.
The final chapter of the book explores some of the most common questions surrounding Bitcoin: Is Bitcoin mining a waste of energy? Is Bitcoin for criminals? Who controls Bitcoin, and can they change it if they please? How can Bitcoin be killed? And what to make of all the thousands of Bitcoin knock-offs and the many supposed applications of Bitcoin’s ‘blockchain technology’?The Bitcoin Standardis the essential resource for a clear understanding of the rise of the Internet’s decentralized, apolitical, free-market alternative to national central banks.
A worthy counterpart to Andreas Antonopoulos’ ‘Mastering Bitcoin’ series, the book focuses on providing an accessible yet fully-rounded understanding of the revolution Bitcoin represents. Despite only being available for purchase for a few months, The Bitcoin Standard has already garnered such praise that lists have appeared summarizing various readers’ favourite quotations. We have chosen our personal top quotes, which range from an elegant one-sentence description of what Bitcoin ‘is’ to the fragility of ‘government money,’ which appeared just a century ago.
On what Bitcoin is:
Bitcoin can be best understood as distributed software that allows for transfer of value using a currency protected from unexpected inflation without relying on trusted third parties.
On Bitcoin mining cost:
For something to assume a monetary role, it has to be costly to produce, otherwise the temptation to make money on the cheap will destroy the wealth of the savers, and destroy the incentive anyone has to save in this medium.
On the 20th century advent of government-controlled currency:
World War I saw the end of the era of monetary media being the choice decided by the free market, and the beginning of the era of government money.
“Had European nations remained on the gold standard, or had the people of Europe held their own gold in their own hands […], history might have been different. It is likely that WorldWar I would have been settled militarily within a few months of conflict”
On The Great Crash of 1929
“The cause of the Great Crash of 1929 was the diversion away from the gold standard in the post-WWI years, and the deepening of the Depression was caused by government control and socialization of the economy in the Hoover and FDR years”
On the abandonment of the gold standard:
It is ironic, and very telling, that in the era of government money, governments themselves own far more gold in their official reserves than they did under the international gold standard of 1871–1914.
On Traditional Banking system
Even if the textbooks were correct about the benefits of government management of the money supply, the damage from one episode of hyperinflation anywhere in the world far outweighs them”
On 21st-century interest rates and inflationary national debt:
Savings rates have been declining across the developed countries, dropping to very low levels, while personal, municipal, and national debts have increased to levels which would have seemed unimaginable in the past.
Capitalism is what happens when people drop their time preference, defer immediate gratification, and invest in the future. Debt-fueled mass consumption is as much a normal part of capitalism as asphyxiation is a normal part of respiration.
“Hyperinflation is a form of economic disaster unique to government money. There was never an example of hyperinflation with economies that operated a gold or silver standard”
“Hyperinflation is a far more pernicious phenomenon than just the loss of a lot of economic value by a lot of people; it constitutes a complete breakdown of the structure of economic production of a society built up over centuries and millennia”
On the ethos behind Bitcoin’s fixed supply:
By placing a hard cap on the total supply of bitcoins, Nakamoto was clearly unpersuaded by the arguments of the standard macroeconomics textbook and more influenced by the Austrian school, which argues that the quantity of money itself is irrelevant.
On modern banking:
Banking has evolved into a business that generates returns without risks to bankers and simultaneously creates risks without returns for everyone else.
On Bitcoin’s Blockchain:
The Bitcoin ledger of transactions might just be the only objective set of facts in the world.
On Bitcoin volatility:
Bitcoin’s volatility derives from the fact that its supply is utterly inflexible and not responsive to demand changes, because it is programmed to grow at a predetermined rate.