Unveiling “The Bitcoin Standard: Embracing Decentralization over Central Banking
In 2008, an anonymous programmer introduced a groundbreaking “fully peer-to-peer, with no trusted third party” electronic cash system to a small online mailing list, initially attracting minimal attention. Fast forward ten years, against all odds, this autonomous and decentralized software has evolved into an unstoppable global hard money alternative to conventional central banks. “The Bitcoin Standard” dives deep into the historical context of Bitcoin’s rise, its economic properties that fueled rapid growth, and its potential economic, political, and social implications.
Although Bitcoin is a product of the digital age, the fundamental problem it addresses has existed since the dawn of human society: the transfer of value across time and space. Ammous skillfully guides readers through the historical evolution of various money technologies, from early systems involving limestones and seashells to metals, coins, the gold standard, and modern government debt. Understanding what granted these technologies their monetary status, and how many of them lost it, provides valuable insights into the characteristics of sound money. This lays the groundwork for an economic exploration of its effects on individual and societal future-orientation, capital accumulation, trade, peace, culture, and art. Ammous compellingly argues that the loftiest achievements of humanity occurred under sound monetary regimes, while monetary collapse has often preceded civilizational decline.
With this historical backdrop, the book proceeds to demystify the workings of Bitcoin in a comprehensible and intuitive manner. Bitcoin, as a decentralized and distributed software, converts electricity and processing power into indisputably accurate records, enabling users to conduct traditional money functions via the Internet without relying on any authorities or physical infrastructure. Thus, Bitcoin emerges as the first successful implementation of digital cash and digital hard money. Its automated and predictable monetary policy, coupled with the ability to facilitate quick settlement of large sums across the globe, positions it as a potential store of value and network for final payments—a digital form of gold with built-in settlement capabilities.
Ammous masterfully navigates the technological possibilities and historical realities of monetary evolution, offering a captivating exploration of the implications of voluntary free market money. By challenging the entrenched government monopolies, Bitcoin alters the balance of sovereignty, favoring individuals and paving the way for a world where money remains divorced from politics and unrestricted by borders.
The final chapter addresses common questions about Bitcoin: its energy consumption, associations with criminal activities, governance, susceptibility to change, potential vulnerabilities, and the multitude of Bitcoin alternatives and supposed applications of blockchain technology. “The Bitcoin Standard” serves as an indispensable resource for understanding the ascent of the Internet’s decentralized, apolitical, and free-market alternative to national central banks.
ABOUT THE AUTHOR
SAIFEDEAN AMMOUS, Ph.D., is a Professor of Economics at the Lebanese American University, and a member of the Center on Capitalism and Society at Columbia University.
