Skip to main content

The Bitcoin Standard by Saifedean Ammous

 An uneven and at times repetitive book, but yet a book that absolutely must be read by anyone who wants to learn about Bitcoin and why Bitcoin matters. 


Some chapters sing out with a compelling bull case for Bitcoin and offer lay readers an excellent rendering of monetary history. In other chapters the author gets bogged down in repetitive economic hand waving, while blaming everything bad about modernity (and I mean *everything* up to and including Miley Cyrus's twerking) on leaving a sound money standard. 

Most reasonable readers--and certainly anyone who's at least ankle deep in learning about Bitcoin--would agree on the value of sound money and the value of holding monetary authorities to a sound money standard.

But for Saifedean the lack of a sound money is a hammer in his hand... and the entire world is a nail. I've found this to be a problem for many Bitcoiners, especially Bitcoin maximalists, hence the often used phrase "Bitcoin solves this" used (only partially tongue in cheek) to address any and all problems of modernity. 

One could describe Ammous' near obsession with "stock to flow ratios" as another hammer, and in this case Bitcoin, or rather Bitcoin's future price, is the nail. There's a problem with using a stock to flow analysis to predict Bitcoin's price, because the halvenings (and when they will occur) are already well-known and well-mapped out, thus likely already incorporated in Bitcoin's price. I don't put much "stock" in this method of valuing Bitcoin. 

But these are minor criticisms compared to the real value of this book: it gives the reader a complete paradigm for how to think about Bitcoin, how to think about money, and how to think about preserving wealth in an imperfect world of loose monetary policy imposed by centralized and highly fallible monetary authorities. 

A few more bullet points: 

1) Excellent discussion of time preference, a very useful concept unfortunately not taught in schools, nor understood by the very people who would most benefit from this ultimate cheat code to life.

2) Keynesianism and monetarism, interestingly, are not much different from the democrat/republican paradigm that falsely divides ideology into two opposing factions (but really one-party rule) of modern pseudo-democracy.

3) Ammous creatively (and justifiably) reframes Keynes's famous maxim "In the long run we are all dead" as a high time preference statement of "libertine irresponsibility." He's right! Only a genuine narcissist wouldn't care about the state of the world after he or she was dead.

4) Intriguing thoughts at the end of the book where the author explores potential applications (or rather lack thereof) of blockchain technology, persuasively arriving at the conclusion that blockchain is a lot less useful than people think it is, except it's extremely useful for the specific application known as Bitcoin.

More Posts

How I Found Freedom in an Unfree World by Harry Browne

This book is a praxis: a set of real-world practices for navigating reality as it is, rather than how we wish it to be. The language is clear and direct, and the book aggregates into a highly robust and coherent work of practical, livable philosophy. Author Harry Browne developed this philosophy over the course of many years, and it's inspiring to hear him talk about his mistakes, his refinements in thinking over time, and the surprising and often liberating benefits that came his way as he followed his own practices. This author eats his own cooking, and the result is a generous gift to readers. This does not mean you'll agree with everything the author writes! In fact, Browne encourages readers to disagree with him as we sort out  our specific values, rules and boundaries. He wants volitional readers, not readers looking to be told what to think and do. We'll come back to this idea. [A quick  affiliate link to Amazon  for those readers who would like to support my wor...

Deflation and Liberty by Jorg Guido Hulsmann

In the modern centralized monetary system, all values are inverted. Debt masquerades as money, the system imposes structural inflation and monetary debasement on everyone, and GDP "growth" is increasingly an economic illusion because of that inflation and debasement. Nearly everyone gets fooled into thinking their wages, home values and stock portfolios are "rising"--and this is yet another illusion thanks to the steady debasement of the money. In such a system, anyone living off wage income, who isn't (yet) an asset owner, gets squeezed a little tighter every year. And this is the primary reason we have a so-called K-shaped economy, where asset owners do well, while those living off their labor value don't. It all comes from steady, deliberate monetary debasement. Our author believes this is immoral, and he's right. He believes that the institution behind our monetary system (the US Federal Reserve) is immoral, and he's right. Further, he believes ...

The Art of War in the Middle Ages by Charles Oman

A wonderful, information-dense book surveying the evolution of warfare across the Middle Ages, and a glorious starting point for readers to contextualize an enormous amount of European history. There's a great deal of historical knowledge here that author Charles Oman assumes in his readers.  And so the very act of reading this book (and looking up the author's near-constant historical references) equates to a semester or two--at least--of upper-level undergrad European history. Read this book and spend some time looking things up. Then read several more books like this [1].  Pretty soon, enough osmosis happens such that the various battles and historical figures this author mentions casually will be things you start mentioning casually: Cannae, Adrianople, Brunanburh, Hastings, Robert Guiscard, Durazzo, Tours, Crecy, Agincourt, Arnold von Winkelried, Albrecht von Wallenstein, and so on. (This will be an inner monologue of course, because we all know how much every...