The Bitcoin Standard: The Decentralized Alternative to Central Banking

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A similar situation exists with national currencies, where central banks are expected to maintain relative stability in the purchasing power of their currencies by setting the parameters of their monetary policy to counteract market fluctuations. Once people figured out you could exchange universally valued objects for goods, everything changed. People are allowed to have ideologies, but it shows good faith to be explicit that this is what is being discussed: this is political ideology, not economic or monetary theory per se. Ammous holds a bachelor’s degree in engineering and a PhD in Sustainable Development, yet he claims that university curricula in economics ignore time preference, “to the point that many academic economists have no familiarity with the term time preference.

Beginning with a history of gold, Ammous looks at different types of money in history and shows how Bitcoin fits in.The artificially low interest rates and the excess printed money deceive the producers into engaging in a production process requiring more capital resources than is actually available. Sentence-Summary: The Bitcoin Standard uses the history of money and gold to explain why Bitcoin is the way to go if the world wants to stick to having sound money and why it’s the only cryptocurrency to be focusing on right now. Online reviews, social media posts, and Twitter bios echo similar sentiments: the book is apparently revelatory and life-changing, putting people on The Bitcoin Standard pathway, initiating them into the HODL culture of BTC maximalism.

The demonetization of silver in effect left the Chinese and Indians in a situation similar to west Africans holding aggri beads as Europeans arrived: domestic hard money was easy money for foreigners, and was being driven out by foreign hard money, which allowed foreigners to control and own increasing quantities of the capital and resources of China and India during the period. The law also stipulates that retailers must accept Bitcoin as payment (technological capabilities permitting). Unfortunately, there doesn’t seem to be a viable way around this: the more transactions that happen, the more copies of the ledger need updating. The fatal flaw of the gold standard at the heart of these two problems was that settlement in physical gold is cumbersome, expensive, and insecure, which meant it had to rely on centralizing physical gold reserves in a few locations—banks and central banks—leaving them vulnerable to being taken over by governments. 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.

We discuss the history of Coinkite, and how they evolved over time from a software to a hardware company, the success of the OpenDime as a bitcoin bearer asset, the Coldcard hardware wallet, and their upcoming advanced device Q1. And what to make of all the thousands of Bitcoin knock-offs, and the many supposed applications of Bitcoin’s ‘blockchain technology’? money whose supply is hard to increase is known as hard money, while easy money is money whose supply is amenable to large increases. Saifedean was a professor of Economics at the Lebanese American University from 2 Saifedean Ammous is an internationally best-selling author and economist.

Bitcoin is, after all, an electronic cash system, neither intended to, nor capable of replacing banking. 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. No matter how much hashing power is expended on processing blocks that are invalid, they will not be validated by a majority of Bitcoin nodes. 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.As a dollarised economy, the US dollar will continue to serve as fiat currency alongside Bitcoin, but the move positions Bitcoin—the world’s leading cryptocurrency—as a transactional standard in the country. Connor Boyack, the author of the highly popular children's book series The Tuttle Twins, joins us to discuss teaching liberty to children, why it is so important, how to do it right, and how his book series has sold more than 5 million copies to liberty -minder children and parents worldwide! This is a lesson worth remembering when we turn to the discussion of the soundness of government money in the later parts of the book. 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. It is perhaps one of the most remarkable achievements of the Internet that an online economy that spontaneously and voluntarily emerged around a network designed by an anonymous programmer has grown, in nine years, to hold more value than is held in the money supply of most nation‐states and national currencies.

The legitimate—essential to capitalist growth—role of business entrepreneurs going to entrepreneurial bankers to seek fresh credit (new money created as a loan ex nihilo based on good collateral and good prospects) is completely ignored. So even as technology has improved for gold mining, the supply of gold grows both slowly and predictably. In the beach town of El Zonte, as part of the Bitcoin Beach project, numerous businesses accept BTC as payment. Even if the central planning system succeeded in managing a static economy, it is powerless to accommodate change or to allow entrepreneurship. History shows it is not​ possible to insulate yourself from the consequences of others holding money that is harder than yours.Civilization is not about more capital accumulation per se; rather, it is about what capital accumulation allows humans to achieve, the flourishing and freedom to seek higher meaning in life when their base needs are met and most pressing dangers averted. This might make a compelling case for establishing a currency backed by bitcoin, essentially a new gold standard. Detractors have raised issues surrounding Bitcoin’s volatility, while economist and historian George Selgin noted that certain clauses in the legislation are coercive in forcing Salvadoran merchants and companies to accept Bitcoin as payment. But with the suspension of the gold standard, running out of financing was not enough to end the war; a sovereign had to run out of its people’s accumulated wealth expropriated through inflation.