The Bitcoin Standard: The Decentralized Alternative to Central Banking

by Saifedean Ammous

Overview

A comprehensive and authoritative exploration of Bitcoin and its place in monetary history

When a pseudonymous programmer introduced "a new electronic cash system that’s fully peer-to-peer, with no trusted third party" to a small online mailing list in 2008, very few people paid attention. Ten years later, and against all odds, this upstart autonomous decentralized software offers an unstoppable and globally accessible hard money alternative to modern central banks. The Bitcoin Standard analyzes the historical context to the rise of Bitcoin, the economic properties that have allowed it to grow quickly, and its likely economic, political, and social implications.

While Bitcoin is an invention of the digital age, the problem it purports to solve is as old as human society itself: transferring value across time and space. Author Saifedean Ammous takes the reader on an engaging journey through the history of technologies performing the functions of money, from primitive systems of trading limestones and seashells, to metals, coins, the gold standard, and modern government debt. Exploring what gave these technologies their monetary role, and how most lost it, provides the reader with a good idea of what makes for sound money, and sets the stage for an economic discussion of its consequences for individual and societal future-orientation, capital accumulation, trade, peace, culture, and art. Compellingly, Ammous shows that it is no coincidence that the loftiest achievements of humanity have come in societies enjoying the benefits of sound monetary regimes, nor is it coincidental that monetary collapse has usually accompanied civilizational collapse.

With this background in place, the book moves on to explain the operation of Bitcoin in a functional and intuitive way. Bitcoin is a decentralized, distributed piece of software that converts electricity and processing power into indisputably accurate records, thus allowing its users to utilize the Internet to perform the traditional functions of money without having to rely on, or trust, any authorities or infrastructure in the physical world. Bitcoin is thus best understood as the first successfully implemented form of digital cash and digital hard money. 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 real competitive edge might just be as a store of value and network for the final settlement of large payments a digital form of gold with a built-in settlement infrastructure.

Ammous’ firm grasp of the technological possibilities as well as the historical realities of monetary evolution provides for a fascinating exploration of the ramifications of voluntary free market money. As it challenges the most sacred of government monopolies, Bitcoin shifts the pendulum of sovereignty away from governments in favor of individuals, offering us the tantalizing possibility of a world where money is fully extricated from politics and unrestrained by borders.

The final chapter of the book explores some of the most common questions surrounding Bitcoin: Is Bitcoin mining a waste of energy? Is Bitcoin for criminals? Who controls Bitcoin, and can they change it if they please? How can Bitcoin be killed? And what to make of all the thousands of Bitcoin knockoffs, and the many supposed applications of Bitcoin's 'block chain technology'? The Bitcoin Standard is the essential resource for a clear understanding of the rise of the Internet’s decentralized, apolitical, free-market alternative to national central banks.

Product Details

ISBN-13:	9781119473862
Publisher:	Wiley
Publication date:	04/24/2018
Pages:	304
Sales rank:	45,396
Product dimensions:	6.00(w) x 9.10(h) x 1.00(d)

About the Author

SAIFEDEAN AMMOUS, PHD, is a Professor of Economics at the Lebanese American University, and member of the Center on Capitalism and Society at Columbia University.

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Table of Contents

About the Author xi

Foreword xiii

Prologue xv

Chapter 1 Money 1

Chapter 2 Primitive Moneys 11

Chapter 3 Monetary Metals 17

Why Gold? 19

Roman Golden Age and Decline 25

Byzantium and the Bezant 28

The Renaissance 29

La Belle Époque 34

Chapter 4 Government Money 41

Monetary Nationalism and the End of the Free World 43

The Interwar Era 47

World War II and Bretton Woods 53

Government Money’s Track Record 60

Chapter 5 Money and Time Preference 73

Monetary Inflation 81

Saving and Capital Accumulation 90

Innovations: “Zero to One” versus “One to Many” 96

Artistic Flourishing 98

Chapter 6 Capitalism’s Information System 105

Capital Market Socialism 109

Business Cycles and Financial Crises 113

Sound Basis for Trade 126

Chapter 7 Sound Money and Individual Freedom 135

Should Government Manage the Money Supply? 136

Unsound Money and Perpetual War 145

Limited versus Omnipotent Government 149

The Bezzle 155

Chapter 8 Digital Money 167

Bitcoin as Digital Cash 168

Supply, Value, and Transactions 177

Appendix to Chapter 8 191

Chapter 9 What Is Bitcoin Good For? 193

Store of Value 193

Individual Sovereignty 200

International and Online Settlement 205

Global Unit of Account 212

Chapter 10 Bitcoin Questions 217

Is Bitcoin Mining a Waste? 217

Out of Control: Why Nobody Can Change Bitcoin 222

Antifragility 230

Can Bitcoin Scale? 232

Is Bitcoin for Criminals? 238

How to Kill Bitcoin: A Beginners’ Guide 241

Altcoins 251

Blockchain Technology 257

Acknowledgements 273

Bibliography 275

List of Figures 282

List of Tables 284

Index 285

What People are Saying About This

From the Publisher

"I have spent my entire career studying works about monetary theory, the gold standard, comparative monetary systems, central banks, and proposals for monetary and financial reform. I would rate a tiny fraction of the books I have read about any one of these topics as excellent. Dr. Ammous' book, The Bitcoin Standard, contains an excellent treatment of all these topics in addition to one of the few enlightened and enlightening accounts of Bitcoin that I have come across. It is essential reading for anyone interested in learning the role Bitcoin could play in a future regime of free and sound money."
—Joseph Salerno, Academic Vice President, Mises Institute

"This book blew my mind; it is a work of genius. It put together the technical, economic, motivational and related issues around Bitcoin better than anything I've seen. The best compliment I can give this book is that I read it and I decided to buy $425m of bitcoin. It was the most impactful on our way of thinking in Microstrategy and it made us want to invert our balance sheet to base it on a bitcoin standard."
—Michael Saylor, cofounder, chairman, and CEO of Microstrategy

"The Bitcoin Standard is an incredible book."
—Russel Okung, NFL Super Bowl winner

"Dr. Saifedean Ammous gave us the definitive book on digital money with The Bitcoin Standard, a must-read for anyone interested in monetary tech and worried about ruinous fiat regimes. Now his online academy gives students access to the man himself, an opportunity to learn economics as it should be taught: at market prices, online, with no wasted time or material. Ammous is a brilliant and concise teacher of Austrian school economics, and I cannot recommend his courses highly enough."
—Jeff Deist, President, Mises Institute

"Hoy les recomiendo EL Patròn Bitcoin, este libro es el mejor y más importante para entender Bitcoin."
—Ricardo Salinas Pliego, Founder and Chairman of Grupo Salinas

"The Bitcoin Standard is a great book. A really good book. It helps you understand why bitcoin is so special and so real."
—Kiril Sokoloff, Chairman and founder, 13D Global Strategy & Research