The Bitcoin Standard

By 8bitb4rt | Proof of Work | 1 Oct 2022

There is a glaring lack of bitcoin and blockchain literature in my opinion. The bear market seems a great time to devour any books on blockchain and get some insight from previous cycles. I read The Bitcoin Standard by Saifedean Ammous and here is my book review.

The book is about 300 pages long and the first 165 pages tell the history of money. Bitcoin is barely mentioned at all in this portion of the book. The author starts with Rai Stones on Yap Islands, then metal money such as brass, Roman money, money backed by gold, post gold standard money, and finally brings up the alternative of decentralized digital money. Its all told through the lens of Austrian Economics which advocates individualism. The main tenant of this school in relation to money is that economic incentives will drive individuals to behave rationally to foster economic prosperity. If hard money such as gold is available, people will have a longer time horizon and thus value the future more than the present and make choices like save or build wealth through innovation. The author argues that easy money , or money that can be printed out of thin air, causes society to mortgage the future in favor of short term satisfaction because their wealth will decrease in the future due to currency debasement.

He definitely makes some decent points about hard money (broadly gesture at everything happening right now). However, he takes some big liberties in my opinion. Stating that music and art in the 1800s was better than contemporary art because they had hard money? It was pretty clear he hated Keynesian Economics on a personal level. I'm not a economist or anything, but I felt the tone really subtracted from his credibility.

Then it was on the bitcoin in the final chapters. His explanation wasn’t too technical in nature. He briefly explained the basics such as proof of work, blockchain tech, and hard capped limit. He compares it to gold in the desirable qualities such as durability, portability, acceptability, limited supply, divisibility and uniformity.  The author concludes BTC is digital gold and in many ways superior to gold. Some quotes that really stood out to me: “Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased matter how much it's value rises.” He then focuses on BTC potential as a universal sound money making a case that the Banks and countries that adopt early will have a huge advantage. “But perhaps the real case for banks owning Bitcoin is as insurance against the scenario of it succeeding.” Saifedean Ammous also mentions some of the limitations of BTC like TPS and admits that certain types of transactions are not likely to be practical.

All in all I really enjoyed the book. It was an easy read compared to some of the other crypto books that use too much technical jargon. It is a good gateway to the crypto newcomer who wants to get the sense of why the community thinks it so revolutionary. I do also agree with the sentiment that governments cannot resist the lure of printing money to pursue frivolous projects and short term success in a bid to get re elected. Take the money out of the governments hands, they cant be trusted. I give it 19 out of 21 Satoshis.

It is some serious Michael Saylor wanking material.

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Proof of Work
Proof of Work

Welcome to my proof of work book club! Since it’s a bear market right now, I thought it practical to go back and read some books written from previous cycles. I was curious how well they aged and how they would tell an interesting story without seeming irrational due to the volatile nature of cryptocurrency. I’ve found that most reviews seem to be done by no coiners, or folks with very limited crypto exposure. Thus, I think a lot of reviews are misleading or just plain lame. Ill also post about BTC here.

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