The Bitcoin Standard: The Decentralized Alternative to Central Banking

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Sin embargo, nada más comenzar su lectura comprendí que su autor había dado otro enfoque totalmente diferente. This is grade F stuff. Keynes is branded an authoritarian despot for arguing for individual liberty and freedom against the everyday suffocating threat of revolution and war. It’s not clear whether the wanton misrepresentation of Keynes’ thinking—and by implication, everything he allegedly represents as the Antichrist of ‘unsound money’—is due to ignorance, or mendacity. Perhaps Ammous has a high time preference when it comes to studying what Keynes actually wrote. Some compensation for fans of Keynes is that Ammous is nearly as dismissive of Milton Friedman and the “Friedman brand of libertarianism.” It’s Rothbardian anarcho-capitalism or bust. money that is easy to produce is no money at all, and easy money does not make a society richer; on the contrary, it makes it poorer by placing all its hard‐earned wealth for sale in exchange for something easy to produce.

Note: Argument is that money is key technology of civilization. Presumably, because it enables social scalability. A major advantage in securing centralized credit is scale, as it appears quantitatively less risky to lend to large‐scale lenders. The larger the firm, the more predictable the formula for its success, the larger the collateral in case it fails, and the more secure bank bureaucrats feel when making loans according to central bank lending criteria. While many industries could benefit from economies of scale, centralized credit issuance accentuates the advantages of size above and beyond what would be the case in a free market. sound money is an essential requirement for individual freedom from despotism and repression, as the ability of a coercive state to create money can give it undue power over its subjects, the power which by its very nature will attract the least worthy, and most immoral, to take its reins.The well‐known phenomenon of the modern breakdown of the family cannot be understood without recognizing the role of unsound money allowing the state to appropriate many of the essential roles that the family has played for millennia, and reducing the incentive of all members of a family to invest in long‐term familial relations. The sum total of the contribution of both these schools of thought is the consensus taught in undergraduate macroeconomics courses across the world: that the central bank should be in the business of expanding the money supply at a controlled pace, to encourage people to spend more and thus keep the unemployment level sufficiently low.

Bitcoin has a huge advantage over gold in transactions: clearance does not require a specific custodian. No government can control what code you have in your head.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. Someone who knows the history of the Great Depression and Bretton Woods era may well recognise the characterisation of this era as a fairy tale. Stylistically, it’s essentially an extended, but bad, undergraduate essay: ranting and polemical. At its low points it’s moronic. Everything Ammous doesn’t like about the period is lumped into the devil incarnate, ‘Keynesian economics’, presented as one homogenous, sub-intellectual blob of stupid ideas, driven by the vanity of self-serving bureaucrats and academics. Any subtlety about the notion of good or bad political governance is simply a manifestation of the ‘Keynesian deluge’. The fact that many high-profile followers of Keynes actively refer to this ‘Keynesian Economics’ as ‘Bastard Keynesianism’—for more nuanced reasons—completely escapes Ammous. Contrary to the most egregiously erroneous and central tenet of the state theory of money, it was not the government that decreed gold as money; rather, it is only by holding gold that governments could get their money to be accepted at all. The larger the market, the more the opportunities for specialization and exchange, but also the bigger the problem of coincidence of wants—what you want to acquire is produced by someone who doesn’t want what you have to sell. El Salvador recently became the first country to accept Bitcoin as legal tender. In doing so, it effectively became a guinea pig for Satoshi Nakamoto’s original vision – and made them a lot of friends in the Bitcoin community in the process.

The preferred type of coin was gold. It has a few unique qualities. First, it’s almost impossible to make or destroy. It also is fairly hard to retrieve from the ground, so you need to mine to get it, and the more you get, the deeper you have to mine. So even as technology has improved for gold mining, the supply of gold grows both slowly and predictably. 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. The Bitcoin Standard combines the arrogant self-assurance of both kindergarten Austrian economics and an anarcho-capitalist ideology into a folksy (yet vitriolic) morality play about the espoused benefits of thrift and self-denial. A 21st century re-writing of The Richest Man in Babylon, without the charm but with a vindictive and patronising attitude towards anyone who disagrees: “The vanity of the insane,” we’re warned. The book’s blind spots also demonstrate what undermines BTC’s ultimate narrative: like it or not, governments will regulate and seek control, regardless. Nero, who ruled from 54–68 AD, had found the formula to solve this, which was highly similar to Keynes’s solution to Britain’s and the U.S.’s problems after World War I: devaluing the currency would at once reduce the real wages of workers, reduce the burden of the government in subsidizing staples, and provide increased money for financing other government expenditure. Had European nations remained on the gold standard, or had the people of Europe held their own gold in their own hands, forcing government to resort to taxation instead of inflation, history might have been different. It is likely that World War I would have been settled militarily within a few months of conflict, as one of the allied factions started running out of financing and faced difficulties in extracting wealth from a population that was not willing to part with its wealth to defend their regime’s survival. 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.The war machines that the government‐directed economies built were far more advanced than any the world had ever seen, thanks to the popularity of the most dangerous and absurd of all Keynesian fallacies Note: I think there is an argument that keynsianism is a coordination problem. If one government adopted Keynesianism and the others didnt then in the short run that gov would conquer the other bringing in more resources and roping the system up. Only after they had conquered everyone and there was nowhere else to go would they colapse? A la rome? easy money trap: anything used as a store of value will have its supply increased, and anything whose supply can be easily increased will destroy the wealth of those who used it as a store of value.