The Downfall of Unsound Money
Saifedean Ammous' book The Bitcoin Standard takes you through the ugly history of unsound money.
He shows how government-issued fiat currencies have been repeatedly debased, devalued, and inflated away.
This robs citizens of their hard-earned wealth.
Monarchs used to clip coins to make them weigh less. The continental currency experiment during the American Revolution was a disaster. The Reichsbank's printers went crazy during the Weimar Republic.
Ammous highlights how governments and central banks can't resist exploiting their money printing powers.
Unsound paper money causes economic distortions and moral hazards.
Cheap credit fuels misallocation of capital and artificially low interest rates.
The "cantillon effect" benefits the first receivers of new money at the expense of the last receivers.
Ordinary savers get punished as inflation erodes their savings.
Abandoning sound, commodity-backed money for unbacked fiat has been a catastrophic attack on property rights and capital accumulation.
Ammous argues this drives the boom and bust cycles plaguing modern economies.
Bitcoin's Unique Value
After showing the failures of fiat systems, Ammous explores Bitcoin's unique properties as potential "sound money."
Sound money is truly scarce, portable, durable, divisible, and resistant to debasement.
With only 21 million bitcoins ever created, enforced by code, Bitcoin offers scarcity and "hardness" never seen before.
Its decentralized design and cryptography make it incredibly resistant to censorship or seizure.
Ammous compares Bitcoin to gold, historically the closest thing to sound money.
But gold isn't as reliably scarce, portable or divisible as Bitcoin. Gold can be minted and moved only at great cost. It lacks Bitcoin's immutable issuance schedule.
Unlike past failed private currencies, Ammous says Bitcoin's first-mover advantage and lack of issuer help it avoid pitfalls.
He argues Bitcoin's energy use isn't wasteful - it's what gives Bitcoin value as sound money.
Separating Money and State
At its core, The Bitcoin Standard makes a moral case for separating money from the state.
Bitcoin is an immutable, rules-based system no government can debase or expropriate.
Ammous sees this as the next step after life, liberty, and property rights from the Enlightenment.
Just as we separated church and state for religious freedom, we must separate money from state control for true economic freedom.
With open source code and programmatic policy, Bitcoin wrestscontrol from untrustworthy central bankers and politicians.
The energy required to change Bitcoin's code is what makes it a credible reserve asset.
While acknowledging scaling challenges, Ammous paints a future where Bitcoin is the ideal savings asset and reserve currency.
Other blockchains like stablecoins handle transactions.
Gradually, nation states may be forced to embrace Bitcoin as the global reserve asset.
This ends humanity's struggle to protect sound money and property rights from debasement by states.
A Bitcoin Manifesto
Whether you become a "bnptrician" or not, the book's research, arguments, and vision for monetary reform are hard to deny.
Ammous has delivered a potential foundational Bitcoiner text and challenge to monetary economists.
Even Bitcoin skeptics get a gripping monetary history and indictment of how fiat corrodes economic freedom.
If Bitcoin succeeds as a global reserve currency, Ammous' sweeping treatise may be remembered as a philosophical anchor.
At minimum, it ensures an important debate on money's future and the state's role ahead.