The Bitcoin Standard: The Decentralized Alternative to Central Banking

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The Bitcoin Standard combines the arrogant self-assurance of both kindergarten Austrian economics and an anarcho-capitalist ideology into a folksy (yet vitriolic) morality play about the espoused benefits of thrift and self-denial. A 21st century re-writing of The Richest Man in Babylon, without the charm but with a vindictive and patronising attitude towards anyone who disagrees: “The vanity of the insane,” we’re warned. The book’s blind spots also demonstrate what undermines BTC’s ultimate narrative: like it or not, governments will regulate and seek control, regardless. Bitcoin is also the first example of absolute scarcity, the only liquid commodity (digital or physical) with a set fixed quantity that cannot conceivably be increased. Jumping to the final three chapters, these are a worthwhile introduction to any newcomer wishing to understand the whole ‘crypto’ movement, although it should be understood that Ammous regards Bitcoin’s principal purpose as a form of universal ‘sound money’: a potential ‘Bitcoin Standard’ to replace the world economy’s long-abandoned gold standard. However, citing the white paper, Ammous clarifies Satoshi’s use-case for Bitcoin:

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. Note: I think there is an argument that keynsianism is a coordination problem. If one government adopted Keynesianism and the others didnt then in the short run that gov would conquer the other bringing in more resources and roping the system up. Only after they had conquered everyone and there was nowhere else to go would they colapse? A la rome? Note: Argument is that money is key technology of civilization. Presumably, because it enables social scalability.Note: Argument is that this monetary nationalism administered by central banks created more upside as well as more downside. In an asymmetric world, AKA Extemistan, that is not worth it. The 61-year-old who thinks that Bitcoin is just another passing craze, the 33-year-old that wants to invest in cryptocurrencies and isn’t sure what they’re doing, and anyone who wants to know the history of money and where our current technologies could be taking us in the future. delay his gratification to engage in risky production over a longer period of time is that these longer processes will generate more output and superior goods. In other words, investment raises the productivity of the producer. It’s a disconcerting reminder that ersatz ‘libertarian’ thought, at its edges, looks a little bit authoritarian: sound money forces you to be more morally upright. After all, the ostensible hero in this morality play is Rothbard whose ‘Ethics’ (cited by Ammous) ultimately resolve into allowing parents to starve their children to death if they wish (presumably a result of high time preference); a problem of neglect that, Rothbard tells us, could be solved through a free-market in babies. This is not classical liberalism, or even mainstream libertarianism, but the hard-core anarcho-capitalism of sociopaths. 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’s purchasing power isn’t 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.

Saifedean was a professor of Economics at the Lebanese American University from 2 Saifedean 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.Contrary to the most egregiously erroneous and central tenet of the state theory of money, it was not the government that decreed gold as money; rather, it is only by holding gold that governments could get their money to be accepted at all. The fundamental flaw of Friedman and Schwartz’s book is typical of modern academic scholarship: it is an elaborate exercise in substituting rigor for logic. 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. 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 fatal flaw of socialism that Mises exposed was that without a price mechanism emerging on a free market, socialism would fail at economic calculation, most crucially in the allocation of capital goods

The sum total of the contribution of both these schools of thought is the consensus taught in undergraduate macroeconomics courses across the world: that the central bank should be in the business of expanding the money supply at a controlled pace, to encourage people to spend more and thus keep the unemployment level sufficiently low. De la tercera parte, me quedo con el capítulo 9 "Para qué es bueno Bitcoin" así como algunas cuestiones del capítulo 10.This explains why the silver bubble has popped before and will pop again if it ever inflates: as soon as significant monetary investment flows into silver, it is not as difficult for producers to increase the supply significantly and bring the price crashing down, taking the savers’ wealth in the process. Note: Once one power did it without causing a run on the bank then they sort of all had to do it because otherwise they would be outspent and lose the war. Could appeal to nationalism to prvent bank run. The Bitcoin Standard is being published in 37 languages: the original English, as well as Arabic, Brazilian Portuguese, Bulgarian, Chinese (traditional), Chinese (simplified), Croatian, Czech, Danish, Dutch, Finnish, French, German, Hungarian, Italian, Japanese, Korean, Norwegian, Persian, Polish, Portuguese, Russian, Spanish, Swedish, Thai, Turkish, Vietnamese. Los capítulos sobre Bitcoin son básicos en cuanto a la tecnología criptográfica que lo soporta, pero creo que explican muy bien por qué sus propiedades son ideales para convertirse, en el mejor de los casos, en la base de un patrón monetario alternativo que sustituya al actual, o al menos en un activo muy atractivo para actuar como depósito de valor durante las próximas décadas.