Unveiling “The Bitcoin Standard: A Decentralized Alternative to Central Banking.”
In 2008, a pseudonymous programmer introduced a revolutionary “fully peer-to-peer electronic cash system, with no trusted third party” to a small online community, garnering minimal attention at the time. However, against all odds, this autonomous and decentralized software has emerged as an unstoppable global hard money alternative to traditional central banks. “The Bitcoin Standard” meticulously examines the historical context of Bitcoin’s ascent, its rapid growth driven by distinctive economic properties, and the potential economic, political, and societal implications it carries.
While Bitcoin represents a groundbreaking invention of the digital age, its underlying purpose—transferring value across time and space—is as ancient as human society itself. Saifedean Ammous takes readers on a captivating journey through the history of money technologies, from archaic systems of trading limestones and seashells to metals, coins, the gold standard, and modern government debt. Understanding what granted these technologies their monetary roles and how they lost them provides valuable insight into the characteristics of sound money, setting the stage for an economic discussion on its impact on future orientation, capital accumulation, trade, peace, culture, and art. Ammous compellingly demonstrates the correlation between the achievements of thriving societies and sound monetary regimes, as well as the link between monetary collapses and the fall of civilizations.
The book then delves into a comprehensive explanation of how Bitcoin operates, offering an intuitive understanding of its decentralized nature. As a distributed piece of software, Bitcoin converts electricity and processing power into infallible records, enabling users to engage in traditional money functions without relying on any physical-world authorities or infrastructure. In essence, Bitcoin emerges as the first successful implementation of digital cash and digital hard money. With an automated and predictable monetary policy and the ability to facilitate swift settlement of substantial sums globally, Bitcoin’s true strength may lie in serving as a store of value and a network for final settlement of significant transactions—a digital form of gold equipped with built-in settlement infrastructure.
Ammous’ astute grasp of technological possibilities and historical realities makes this exploration of the consequences of voluntary free market money truly captivating. As it challenges the very foundations of government monopolies, Bitcoin shifts the balance of power towards individuals, envisioning a world where money stands entirely outside the realm of politics and transcends borders.
The concluding chapter addresses common questions about Bitcoin, including concerns about energy consumption, criminal associations, control, potential manipulation, and the proliferation of Bitcoin-like alternatives and supposed applications of blockchain technology. “The Bitcoin Standard” is an indispensable resource for comprehending the rise of a decentralized, apolitical, free-market alternative to national central banks, reshaping the landscape of the Internet’s financial possibilities.
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.
