‫معيار البيتكوين: البديل اللامركزي للنظام المصرفي المركزي‬

by Saifedean Ammous, Ahmad Hamdan (Translator)

Bitcoin is the newest technology for money—find out how it fits in the future.
Bitcoin is the digital age's novel, decentralized, and automated solution to the problem of money: accessible worldwide, controlled by nobody. Can this young upstart money challenge the global monetary order? Economist Saifedean Ammous traces the history of the technologies of money to seashells, limestones, cattle, salt, beads, metals, and government debt, explaining what gave these technologies their monetary role, what makes for sound money, and the benefits of a sound monetary regime to economic growth, innovation, culture, trade, individual freedom, and international peace.

The monetary and historical analysis sets the stage for understanding the mechanics of the operation of Bitcoin, the reasons for its initial success, and the role it could play in an information economy. Rather than serving as a currency and network for consumer purchases, the author argues Bitcoin is better suited as a store of value and network for settlement between large financial institutions. With an automated and perfectly predictable monetary policy, and the ability to perform final settlement of large sums across the world in a matter of minutes, Bitcoin's true importance may just lie in providing a decentralized, neutral, free-market alternative to national central banks.

Genres: Economics, Finance, Nonfiction, Business, Money, Technology, History

301 pages, Kindle Edition

First published March 23, 2018

About the author

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.

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.

Reviews

[Matt Weller · Rating 3 out of 5]

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%!

[Julian Worker · Rating 4 out of 5]

I thought this was a clear, well-written explanation of the history of money, the rise of Bitcoin and its 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.

[Chris Pacia · Rating 2 out of 5]

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.

[Ovidiu · Rating 2 out of 5]

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.

[Grumpus · Rating 5 out of 5]

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.

[ScienceOfSuccess · Rating 1 out of 5]

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.

[Michael Huang · Rating 1 out of 5]

Though the book contains some interesting stories about money, for the most part, it’s 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’s go back to Gold or the new age version — bitcoin. (Never mind in the mother of all bubbles, the tulip bulbs were bought and sold using gold coins.)

[Makmild · Rating 5 out of 5]

ครบ จบที่เดียวสำหรับคำถามว่า "บิตคอยน์คืออะไร" เพราะคำถามสั้นแต่ต้องตอบยาว ยาวแบบยาวมากๆ (ก็ตอบได้เป็นหนังสืออีกหลายเล่ม) เพราะการจะเข้าใจว่าบิตคอย์คืออะไร ต้องทำความเข้าใจว่า เงินเฟียตคืออะไร จะเข้าว่าเงินเฟียตคืออะไร ก็ต้องดูประวัติศาสตร์การเงินผ่านสายตานักเศรษฐศาสตร์

เล่มนี้อธิบายเข้าใจง่ายมากๆ และตอบอีกหลายคำถามข้องใจเช่น "บล็อคเชนคืออะไร" (แบบสั้นๆ) "altcoinคืออะไร" (แบบสั้นๆ) และ "จะทำลายบิตคอยน์ได้อย่างไร" (ยาวหน่อย)

แนะนำมาก หากไม่สนใจเทคโนโลยีการเงิน เล่มนี้ก็บอกเล่าประวัติศาสตร์การเงินได้อย่างสนุกทีเดียวค่ะ

แต่ข้อเสียของเล่มนี้ โดยส่วนตัวแล้วว่าเข้าใจยากหน่อยเพราะมีศัพท์เฉพาะเยอะ และพูดถึงทฤษฎีทางเศรษฐศาสตร์อยางเคนเชียนและออสเตรียนค่อนข้างเยอะ ถ้ามีพื้นมาหน่อยจะอ่านสนุกขึ้น แต่ถ้าไม่มีเลยก็ยังอ่านได้ค่ะเพราะในเล่มก็เหมือนปูพื้นใหม่ให้เลย ฮ่าๆ

ปล. แปลไทยจะมีเร็วๆนี้นะคะ อดทนรออีกนิด

[Skyler Jokiel · Rating 2 out of 5]

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’s 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⭐️ because the first few chapters are a really good.

[Warren Mcpherson · Rating 3 out of 5]

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.

[Brian · Rating 3 out of 5]

[Note: this is a pretty “rough” 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’m 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’s 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’s 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’s bias or overindulgence: he seems to believe that a monetary standard is almost the sole determinant of a society’s fate. Describing Europe after the fall of Rome, he says “…the absence of a widely accepted sound monetary standard severely restricted the scope for trade, closing societies off from one another and enhancing parochialism as once-prosperous and civilized trading societies fell into the Dark Ages of serfdom, diseases, closed-mindedness, and religious persecution.” (pg. 29) Surely, there were many other factors at play beyond just the monetary standards of the time. Furthermore, how can this claim co-exist with the modern state of affairs, in which we have no sound monetary standard but worldwide trade is busier and richer than ever?

I had similar reactions at several other points in the book, where the author’s 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’s 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, “Money and Time Preference,” inexplicably contains a multi-page rant about modern art, how terrible it is, and how it’s 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’s 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, “Bitcoin Questions,” 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’s sections are headed by actual questions like “Can Bitcoin Scale?”, but the majority are simply topics, like “Antifragility” or “Blockchain Technology.” The chapter really seems tacked on, a sort of repository for topics and rants that Saifedean didn’t find a place for earlier in the text. It’s a very scattered way to end the book.

One more “huh?" moment for me came in Chapter 9, “What Is Bitcoin Good For.” I was quite surprised to see Saifedean advance the idea of “Bitcoin-backed banks” 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’t 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 “Bitcoin-backed banks,” Saifedean does a serious disservice to BItcoin’s real potential, and to the real revolutions that it could bring about.

As much as I was incensed by Saifedean’s 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’s 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’s biases and framework, and checking the validity of each argument presented. One specific thing I’ll 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’s 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 “The 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.” Um… 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 “human time… is the only real scarce resource,” and he keeps doubling down on this, with further statements like “Raw materials are always the product of human labor… and thus humans are the ultimate resource.” This mindset seems so distorted to me that I don’t even know how to really approach it. Saifedean thinks that all economic activity starts with “production,” and uses the example of a fishing trawler that goes out and “produces” fish. The world he sees is one in which human labor and time “produces” valuable goods out of some kind of infinite raw ether. To me this mindset appears dangerously primitive.

I’m 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 “increase production.” 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’t 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’t go there, as much as I wish it would. At a minimum, I have some good ideas for questions and challenges I’d love to share with Saifedean if I ever get a chance to talk with him directly. It’s too bad he’s already blocked me on Twitter.

[Edu Riera · Rating 4 out of 5]

Siempre suelo decir que hablar de economía en términos 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 producción e intercambio de bienes y servicios reales. The Bitcoin Standard sirve para recordarnos algo igual de cierto y que a menudo también se nos olvida: la importancia de tener un “buen dinero” para el correcto funcionamiento del sistema de precios, el aumento de las posibilidades de especialización e intercambio, y para incentivar el ahorro y la planificación a largo plazo.

Y es que este es un libro más sobre historia del dinero y el impacto de distintos patrones monetarios en la economía real que sobre Bitcoin, al que solo dedica los tres últimos capítulos (Ch.8 – Digital Money; Ch.9 – What is Bitcoin Good For?; Ch. 10 – Bitcoin FAQ).

Los 4 primeros capítulos son un fantástico repaso de los distintos bienes que han actuado como dinero a lo largo de la historia y un resumen de cómo ha cambiado el consenso económico respecto a cuál es la política monetaria ideal. Los capítulos 5 – 7 son una introducción a la teoría austriaca de economía pero con una postura demasiado “one-sided” en favor de esta y contra el keynesianismo y monetarismo (que teorías acertadas o no, tienen mejores argumentos para defender su política monetaria ideal que las que se exponen en el libro). Además, en esta parte se introduce un fuerte componente ideológico libertario y el autor se va por las ramas opinando sobre temas como el arte contemporáneo o la vida de Keynes, que son claros “off-topics”.

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.

Leyendo The Bitcoin Standard me he dado cuenta de que para entender Bitcoin no es tan importante ser un experto en su tecnología como entender bien que características ha de tener un buen activo monetario y el impacto de este en la economía real. Creo que a pesar de los desvaríos ideológicos y la posición austriaca radical del autor, el libro cumple bien con este objetivo, y aunque me hubiese gustado que tocara la parte técnica un poco más en profundidad, creo que en conjunto es un 4/5.

[Adrian · Rating 2 out of 5]

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’t worth reading in my opinion

[Rob Price · Rating 4 out of 5]

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

[Armin · Rating 5 out of 5]

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’s unique and has no equal. This will be my standard recommendation to anybody interested in Bitcoin or the crypto space in general.

[Raphael Leiteritz · Rating 5 out of 5]

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.

[Huw Evans · Rating 2 out of 5]

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.

[Napat P · Rating 2 out of 5]

ถ้าจะพูดถึงหนังสือเรื่องนี้ในครั้งแรกที่ได้อ่าน คงอยากจะให้คะแนนเต็มพร้อมกับอวยมันให้กับทุกคนที่รู้จัก นี้มันคือหนังสือที่ไม่มีแต่เนื้อ(วิชาการจ๋า)และไม่ได้จมไปกับน้ำ(บ่นอคติเต็มไปหมด) นี้มันคือเนื้อนุ่มชุ่มช่ำ แน่นแต่กินง่าย สุดยอดจริงๆ

อ้าวไม่ใช่ว่ะ


หนังสือเรื่องนี้มีจุดประสงค์ง่ายๆคือ “bitcoinมันดียังไง” โดยการสาธยายว่าสกุลเงินต่างๆหรือสิ่งของแลกเปลี่ยน ที่เคยเกิดขึ้นมันเจ๊งหรือมีปัญหาได้ยังไง และการโดดมาของbitcoinมันจะปฏิวัติวงการนี้จริงๆหรอ

เพราะงั้นหนังสือเลยถีบเราไปเรียนรู้รูปแบบการแลกเปลี่ยนตั้งแต่ยุคโบราณกันเลย หลังจากนั้นก็ชี้ให้เห็นว่า “ทองคำ” คือตัวแทนของการแลกเปลี่ยนที่ดีที่มนุษย์เคยค้นพบมาเลยทีเดียว ซึ่งขอพูดเลยว่าส่วนนี้สนุกมากๆๆๆๆๆๆๆๆๆๆๆๆๆๆๆ เป็นส่วนที่อธิบายแบบเข้าใจง่ายและเห็นภาพได้ดีมากๆ ทองคำแม่งพระเจ้าชัดๆ

แล้วแม่งก็ออกมาบรื๋อทันทีที่เข้าองค์สองของหนังสือ

หนังสือเริ่มพาเราเข้าไปสู่การมาของเงินเฟียต(หรือเงินธนบัตรที่ออกโดยรัฐ) แล้วก็อธิบายถึงข้อเสียของมันแบบสุดโต่ง ถึงจุดหนึ่งของการอ่านทำให้ต้องหยุดคิดก่อนว่า “ไอที่มันเขียนมานี้อคติมันเองปะวะ”

ผู้เขียนชี้ให้เห็นว่า การมีอยู่ของเงินเฟียตเป็นสาเหตุที่ทำให้เกิดความชิบหายต่างๆในประวัติศาสตร์ของประเทศนั้นๆ หรือ ยุคนั้นเลยก็ได้ ถึงแม้ว่าสาเหตุจะค่อนข้างฟังขึ้น แต่ทั้งหมดมาจากการคาดเดาของผู้เขียนทั้งนั้น การจะบอกว่า การเสื่อมโทรมของศิลปะหรือเทคโนโลยี มาจากการมีอยู่ของเงินเฟียตก็เวอร์ไปหน่อย

การที่เนื้อหาส่วนใหญ่ที่มาจากองค์สอง(ซึ่งล่อไปครึ่งเล่ม) เป็นแค่การเน้นย้ำซ้ำๆว่าเงินธนบัตรที่เราใช้อยู่มันแย่นู้นนี้ ทำให้หนังสือเรื่องนี้อยากจะลงรายละเอียดกับการกระทืบตัวระบบธนบัตรมากกว่าจะพูดถึงbitcoinเสียอีก

องค์สุดท้ายคือสิ่งที่ควรจะปรากฏตั้งแต่บทกลางๆของเรื่อง ซึ่งก็คือ “bitcoin มันคืออะไร”

โหไอห่า มึงก็เล่านานเกิ้นกว่าจะเข้าเรื่อง ประเด็นที่สัมผัสได้ชัดๆเลยคือตัวbitcoinมันฟังดูดีจริงๆ มันสามารถที่จะปฏิวัติสกุลเงินต่างๆที่เคยเกิดมาได้ทันที(รายละเอียดเชิญตำเอาเอง) ถึงแม้ว่าจะมีข้อเสีย แต่พูดเขียนก็เต็มใจที่จะหยิบมาพูดให้ฟังไม่มากก็น้อย

แต่ข้อเสียส่วนหนึ่งคือ ตัวผู้เขียนแทบจะให้เวลากับการปูพื้นฐานระบบcyptoน้อยชิบบบบบหาย รู้นะว่านี้คือbitcoin แต่พี่พูดถึงระบบภาพรวมเยอะๆหน่อยก็ดีพี้


โดยรวมหนังสือเรื่องนี้สามารถย่นให้เหลือ200-300หน้าได้สบาย ถ้าคนเขียนตั้งใจจะโฟกัสกับแค่ตัวbitcoinมากกว่าการนั่งด่าเงินเฟียตไปครึ่งเล่ม ถามว่าควรค่าแก่การอ่านไหม? ไปนั่งอ่านบทความหรือดูคลิปในyoutubeน่าจะกระชับและละเอียดกว่าเยอะะะะ

ให้2ดาวเพราะส่วนแรกของหนังสือดีเวอร์ครับ ประทับจาย

[Katie · Rating 1 out of 5]

Really poor. It’s concerning that Wiley would release an opinion piece, and it’s 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’t have a strong background in economics or knowledge of the Austrian school of thought, and who took the assertions made here at face value?

[Tim · Rating 3 out of 5]

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...

[Murtaza · Rating 3 out of 5]

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 – 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.

[René Gehrmann · Rating 4 out of 5]

Für jeden, der mehr darüber lernen möchte, wie Geld sich über die Geschichte hinweg verändert hat und wie es heute funktioniert, echt empfehlenswert. Untersucht wird auch, welchen Einfluss verschiedene Währungssysteme auf die jeweiligen Nationen und deren Kultur, Kunst und Wohlstand gehabt haben. Der Autor (Österreichische Schule) zieht daraus volkswirtschaftliche Erkenntnisse und zeigt auf, weshalb Bitcoin die solideste Währung ist, die es geben kann. Insgesamt also eher eine volkswirtschaftliche als technische Einführung in Bitcoin und definitiv keine Anlageberatung.

[Kumail Akbar · Rating 1 out of 5]

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

[Craig · Rating 5 out of 5]

With all the hype in the crypto space, it’s 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’ll 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’s 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’s argument goes, also requires salability (“the ease with which a good can be sold on the market whenever its holder desires, with the least loss in its price”) and a high stock-to-flow ratio (the ratio of existing captured supply to what’s 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’s 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—since 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’s chemical properties. Silver’s 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’t all that jazzed about this perspective. The book expands quite a bit on this, but the primary critique is that government control lowers money’s stock-to-flow ratio. The Keynesian program isn’t mindless continuous stimulation; at certain junctures it’s 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’t make the called for turnaround following extraordinary stimulation, Keynesian economists come to the unfalsifiable conclusion that we simply didn’t stimulate enough. There’s no proven formulation for proper magnitude of stimulation and so no credible restraint mechanism to prevent a free-floating currency from inflating—whether it’s the Keynesian “right time” for this maneuver or not. It turns out that a money which can be “managed” will be managed quite heavily upward; a superabundance of imagination isn’t 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’s professional work, while Keynes’s entire life is open to reproach. Keynes devotees will be unimpressed, but these criticisms although bitter aren’t 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’s 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 marshmallow test (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 “nudges” would imply top down control—which Bitcoin intrinsically deactivates—if 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’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.

When, on the other hand, wealth is preserved, people remain free to take risk but without being goaded into otherwise intolerable levels. They’re staking real wealth for the prospect of real return rather than lobbing around financial hot potatoes. Under this more Austrian specification we don’t get the systemic cyclicality of top-down injection. Planned inflation also amounts to an opaque tax—a 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’t 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’s 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’ needs. (And here’s 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’t 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’s difficulty adjustment ensures that more effort will not result overall in a greater number of newly minted coins, preserving holders’ purchasing power.

As Ammous shows, the ability to manipulate money supply is perpetually abused. It’s a lure that—whether stemming from tyrannical greed, strategic desire for obfuscation, or ill-guided good intentions—doesn’t go unheeded for long. There’s 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’re also examples of isolated preindustrial societies whose formerly stable currencies (such as rai stones used by Yap Islanders and the glass beads 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’t 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—by sound money accounts—has been gold, which certainly doesn’t seem technological. But exactly this kind of fruitful thinking is how Bitcoin—not without its own IT ancestry—arose.

Even with its rarity and chemical stability gold has its attack vectors. It’s 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’s a denser store of value than, say, cattle—another historical currency from the book), but it’s 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’ vaults. While paper notes solved the divisibility problem, the fact that the gold now remained in the banks was a new point of centralization—one that didn’t go unnoticed by governments. It’s 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’s 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—and not merely due to the technological limitations. Monetary and fiscal policy are firmly established tools of government—with plenty of additional beneficiaries. It’s difficult to see how any entity would willingly relinquish this kind of control. Friedrich Hayek voiced some awareness of this in a 1984 interview quoted by Ammous: “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”

The Bitcoin project may still fail, but if it can’t be Hayek’s sly roundabout introduction of something governments can’t stop it shouldn’t have had much value in the first place. While we’re 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’s antifragility concept (and Taleb followers will be interested to know that he wrote The Bitcoin Standard’s forward), 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’s 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’s predictability promises to preserve as much of the information signal that travels through the monetary medium as possible. Bitcoin’s robustness, it’s 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 blockchain technology these days? Ammous paints the blockchain-not-Bitcoin rhetoric that’s popped up over the last few years as so much hype for doomed endeavors to wrest Bitcoin’s 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:

‘Blockchain technology,’ 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’t seem to find much use in any of it. Bitcoin’s core value proposition is again ultimately it’s resistance to modification. It’d 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’t something that happens overnight. It’s a strength of the network that there’s debate at every step of the process. So in this model, while Bitcoin isn’t likely yet in its final form, it’s not far from it. There’ll be some efficiency upgrades, but so resistant to modification is the protocol that we’re 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’s earliest adopter who foresee Wall Street in nothing but rubble in Bitcoin’s 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 ‘too big to fail.’ A bank that fails is the problem of its shareholders and lenders, and nobody else.

[Review continued in comments...]

[YouMo Mi · Rating 2 out of 5]

Topic: 
 
Rather than dive into the emergence of digital currencies, their significance, and what the future may hold, this book takes a step back and asks “What is money and what purpose has it served historically?” before addressing “What is BitCoin and how is it the same/different as the money of the past?”
 
Style: 
 
Author is an Economics Professor at Lebanese American University.  When he’s discussing the origins of money early in the book and BitCoin/blockchain towards the end, his writing is informative, thoughtful, and lucid. For the rest of the book (which is sadly more than half of it), it’s an exhausting narrative of libertarian doom-and-gloom: the Austrian school (i.e., Hayek, Mises, and Rothbard) upheld as prophets and “Keynesians” blamed for all sorts of evils, from the rise of totalitarianism to the demise of the family unit. The rhetoric in this portion comes across as very smug, very childish, and, more importantly, almost entirely irrelevant to understanding BitCoin.
 
Organization: 
 
For a book with “BitCoin” in its title, only about 25% of the book discusses it. The first three chapters, while off-topic, were a well-researched account of how humans have understood and used money, what purpose money serves in society, and (importantly) why different forms of money have emerged and declined over the last three millennia (Africa, Rome, Polynesia, Europe, and the US, to name a few examples).  Chapter 4 continues with a description of the emergence of fiat money in the 20th century, but this is the beginning of the author’s arrogant rants over five chapters on why 99% of today’s economists are idiots, how econ profs are fostering voluntary servitude by teaching the benefits of an elastic money supply, and how a return to “sound money” like the gold standard would solve everyone’s problems. Halfway through Chapter 8 through Chapter 10, the author finally discusses digital money with a focus on BitCoin, its mysterious creator Satoshi Nakamoto’s vision for a sovereign currency, the technology underlying it, and what impact it will have on monetary policy, financial institutions, and governance generally.
 
I have a feeling the author had two separate, fairly well-written articles on the origins of money and BitCoin, respectively.  He then decided “why not spin this off into a book?” and his way of bridging these topics was channeling angry anarcho-capitalism, a free-market philosophy so averse to any authority, it would not be surprising to hear about these guys running red lights in protest of the government’s hegemony over traffic control.
 
Takeaway: 
 
Blockchain and cryptoassets have increasingly come up in my legal work. I’ve had a coin wallet for the last two years after a friend recommended opening one, but never took it seriously. An article on the use of Ethereum (and similar platforms) for self-executing “smart contracts” in the legal profession recently piqued my curiosity, but a colleague recommended this book as a necessary starting point. I can’t say I agree.
 
Let’s start with what I liked about the book. The author is clearly passionate about the subject matter and has given it a lot of thought.  The origins and evolution of money in the first 3.5 chapters were a great read and I can see why this could be a helpful context for discussing why BitCoin is (arguably) a currency.  I hadn’t appreciated how much technological changes have led (and continue to influence) what humans use as mediums of exchange (notably, how Europeans slowly drained Africa of wealth and slaves via advantages in making beads used as currency and why gold displaced silver as the preferred precious metal to the economic detriment of China and India in the early 20th century). Though I don’t agree with his argument on ditching fiat money, there is certainly more than a kernel of truth in the author’s warnings of the dangers of monetizing debt as a boon for politicians to woo voters with promises of war or welfare without financial accountability.
 
When BitCoin is discussed, the author does a good job of explaining Nakamoto’s vision in 2009: creating a “sovereign” currency free from government’s ability to debase the value by printing money. A limit on supply (only 21 million BitCoins will exist, 17 million of which have been mined so far) and Blockchain are two key traits, the latter being a distributed, decentralized, and public ledger cryptographically recorded in a peer-to-peer network by different computer nodes which are bound by agreed-upon consensus rules (e.g., what Proof of Work algorithm needs to be solved for “mining” BitCoin).  If a disagreement arises over an “upgrade” to these consensus rules (for example, increasing the block size from 1 MB to 8 MB to increase the number of daily transactions), this can lead to a “hard fork” in the network if different groups of nodes agree to be bound by different rules.  This block size dispute is what led to the hard fork between BitCoin and BitCoin Cash in 2017, where the latter essentially became a “spinoff” currency (BitCoin Cash itself has since forked over further disagreements on consensus rules).
 
This block size debate underlies the scaling problems inherent to BitCoin. A small block size limits the number of transactions that can be made in a distributed network and leads to higher transaction fees based on demand exceeding capacity. Opponents of increasing the block size (such as the author) argue this opens the door to undermining the protections a decentralized peer-to-peer network provides against concentration of power in the hands of fewer nodes that can satisfy the more expensive computing power to process larger transaction volumes. This has implications for the fundamental purpose of BitCoin: whether it can become a transactional currency capable of competing with fiat currency or will be relegated to a digital investment along the lines of gold.  The author himself admits BitCoin will never be able to compete with fiat currency based on the technological limitations inherent to blockchain and predicts that, if BitCoin were adopted and stayed true to its principles, it would be an ideal reserve currency with smaller BitCoin-backed currency issued by “freely competitive” banks and transacted in an off-chain layer (along the lines of the current Lightning Network). This sounds more or less like a return to the gold-backed European and American fixed-rate currencies of the early 20th century. Whether one thinks this is a good or bad idea, it is certainly the best-case scenario for BitCoin’s use as money vs. as a new commodity to diversify an investment portfolio.

Unfortunately, these interesting topics represent a small portion as the majority of the book is a long-winded diatribe primarily against other prominent economists (labeled “monetarists”) being wrong about the causes of the Great Depression and how Keynes is a loser as well as a child molester (did we really need to go there?). I don’t pretend to be an economic historian but if you’re interested in counterpoints, this was a good rebuttal: https://seekingalpha.com/article/4162.... One thing I agree with this rebuttal on was the author appears to confuse causation. A country’s loose monetary policy isn’t the impetus for governments to sell their citizens war or new welfare programs; those decisions were made even when the gold standard existed and are based on different (often irrational) considerations. Printing money is a tool resorted to, not a precursor for, bad decisions. Put another way, war wasn’t suddenly desired because countries went off the gold standard; countries went off the gold standard because they wanted to go to war.

The one point I felt the author was dismissing too quickly was the alternative uses of blockchain in the last chapter. It’s ironic that he would dismiss a smart contracts platform such as Ethereum, where individuals and businesses can use blockchain and self-executing protocols to resolve the time-consuming and expensive dilemma of trust and authentication in transactions that governmental bureaucracies and large banks do have a monopoly on. This should be music to his libertarian ears. This is the American Bar Association article that piqued my interest with some the effects it would have for government and the legal industry: https://www.americanbar.org/groups/bu... I suspect the reason the author dismisses smart contracts so quickly is ideological. The author can be characterized as a “BitCoin Maximalist” who look down on alternative use of blockchain or altcoins as futile and even scams because they are not fully sovereign. This presumes the only application of blockchain is to help store value (as in a currency or commodity) which I simply don’t buy. I’m sure there are good reasons to doubt smart contracts (hacking concerns, inherent technological inefficiency compared to centralized network), but I wish the author had spent more time understanding why prominent industries and companies such as pharma, IBM and even crypto-naysayer JP Morgan see value in blockchain outside BitCoin.

Overall, not the best place to learn more about BitCoin or cryptoassets generally. Beginning and end of book are insightful for people who have an interest in why digital currencies may or may not be viable.

[Abby Qin · Rating 1 out of 5]

Just some brief notes for the book I discarded halfway...
1. That the US economy didn't fall after WWII doesn't falsify Keynesian economics. The post-war US economy was boosted by exporting goods and services to European countries...
2. Keynesian economics encourages SPENDING, which includes not only consuming, but also investing.
In the author's logic, hard money will encourage saving, and savings can be used in investing. Yes and no. Yes, hard money will encourage saving. No, savings are not necessarily used in investing. If all the wealth is measured by certain hard money, gold for example, then the purchasing power of one unit of gold will keep growing as our economy grows, because the amount of hard money does not grow as fast as the value it measures.
This creates a free-rider problem. If your money will grow valuable without you doing anything, why bother investing? Investments come with risks. Failed investments make the investors bankrupt. Successful investments not only make the investors rich but also make the economy grow. Once the economy grows, those holding money will become better off without taking any risk to invest.
People holding inflationary fiat money have to spend them faster. However, it doesn't mean they have to buy unnecessary things. Instead, they can spend the money in productive ways. Again, investment is also a type of spending.
In sum, a society envisioned by the author only motivates saving, while a Keynesian economy motivates both consuming and investing.
Enough rebuttals. I stopped when he started to blend his not-so-logical logical reasoning with personal attacks and his screwed sense of aesthetics. We are in a society with socialism for the rich and capitalism for the poor. A common discursive strategy (or stupidity) demonstrated by libertarians is to cite the bailouts (socialism for the rich) and scream "we are too socialist!" Then, they advocate for extreme capitalism for everyone, closing all redistribution channels while ratifying the sheer inequality created and sustained by socialism for the rich as natural and just.

[Arturo Herrero · Rating 5 out of 5]

The Bitcoin Standard by Saifedean Ammous is one of the best non-technical books on Bitcoin. He evaluates Bitcoin from an Austrian School of Economics perspective.

In the foreword, Nassim Taleb associates Bitcoin with Friedrich Hayek’s idea of distributed knowledge. It may fail, but we now know how to do it.

It fulfills the needs of the complex system, not because it is a cryptocurrency, but precisely because it has no owner, no authority that can decide on its fate. It is owned by the crowd, its users.

The book is a 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.

Some key concepts that the book also addresses are time preference (HODL) and limited and scarce resources, and how prices transmit information, and therefore, when resources are scarce, prices will increase or solutions/alternatives are sought (innovation and technological development).

Bitcoin’s maximalist approach.

Bitcoin’s unique properties as a store of value.
What matters is Bitcoin, not the blockchain.
Altcoins do not compete with Bitcoin nor can they.
Zero to One, Peter Thiel’s idea.

Bitcoin is the best sound money ever invented.

Meets all sound money requirements of Menger, Mises and Hayek.
Outside government control: decentralized and free market.
That “something they can’t stop” Friedrich Hayek talked about is Bitcoin.
Bitcoin is the first example of digital scarcity (and absolute scarcity).

Bitcoin is antifragile.

Bitcoin is an embodiment of Nassim Taleb’s idea of antifragility, which he defines as gaining from adversity and disorder. Bitcoin is not just robust to attack, but it can be said to be antifragile on both a technical and economic level.

[Larry · Rating 1 out of 5]

It's harder to review that book than you think. It actually takes the author about 200 pages before he comes to the nitty-gritty (ie Bitcoin), only to replace it with a crash-course on the history of money seen from a dogmatic Austrian economics point of view, in so biased a way that you come to wonder whether this is a pamphlet, a manifesto, a history book, an economics book or something else that hadn't been invented yet. Most of the historical data is particularly messy, with a lot of cherry picking, hinting at a little bit of private production of money here and another bit of privatization there. As far as the part the author is kind enough to devote to the subject of the book is concerned, it's basically a case for BTC and, what is more, for the pure version of BTC as opposed to BTC cash. The author makes a very poor argument in favor of Bitcoin being actually money though it is virtually impossible to buy anything with it on a large enough scale so that it can have the role of money in a global society, with this being chiefly due to structural problems with the blockchain that only updates itself every 10 minutes, and with the capacity of each block being limited in a way that drives transaction fees up etc. I am not aware of any better books on crypto-currencies though, but this one is definitely not a contender.

[Alejandro Álvarez · Rating 4 out of 5]

Compré este libro esperando una explicación detallada de Bitcoin. Tanto a nivel técnico (blockchain, critpografía, etc) como funcional (uso de la moneda como medio de intercambio y refugio de valor).

Sin embargo, nada más comenzar su lectura comprendí que su autor había dado otro enfoque totalmente diferente.

Podríamos decir que el libro se divide en tres partes:

1. Historia del dinero (capítulos del 1 al 4)
2. Teoría monetaria y ciclos económicos (capítulos del 5 al 7)
3. Bitcoin: características, virtudes y cuestiones generales (capítulos del 8 al 10)

Pese a no ser lo que estaba buscando, es un libro que recomendaría a cualquier persona que se interese no solo en Bitcoin sino en la función y orígenes del dinero. En este sentido, la primera parte del libro es fantástica.

La segunda parte toca un tema especialmente controvertido como es la teoría monetaria. En este sentido, el autor tiene un enfoque 100% austriaco y aborrece al máximo las teorías keynesianas tan en boga en la actualidad.

De la tercera parte, me quedo con el capítulo 9 "Para qué es bueno Bitcoin" así como algunas cuestiones del capítulo 10.

En términos generales, un libro recomendable y de amena lectura.

[Taylor Pearson]

One 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 “sound money” 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 — that a sound money which can’t 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.