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the bitcoin standard summary

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“Bitcoin was the first engineering solution that allowed for digital payments without having to rely on a trusted third-party intermediary. “A non-Bitcoin blockchain combines the worst of both worlds: the cumbersome structure of the blockchain with the cost and security risk of trusted third parties”, 130. The Bitcoin Standard book. In other words, investment raises the productivity of the producer. Price and wage controls and legal tender laws were passed, but it was like trying to hold back the tides. Note: Reduces systemic risk. “After years of watching altcoins get created, it seems impossible that any coin will recreate the adversarial standoff that exists between Bitcoin stakeholders and prevents any party from controlling payments in it”, 126. In a society where investment is financed from savings, a small mom‐and‐pop diner competes for customers and financing with a fast‐food giant on an equal footing: customers and investors have a free choice in allocating their money between the two industries. “If the modern world is ancient Rome, suffering the economic consequences of monetary collapse, with the dollar our aureus, then Satoshi Nakamoto is our Constantine, Bitcoin is his solidus, and the Internet is our Constantinople”, 123. The problem is the rest of the book. This currency would oscillate the least with changes in demand and supply, and it would become a globally sought medium of exchange, allowing all economic calculation to be carried out with it, becoming a common unit of measure across time and space. “Whether in Rome, Constantinople, Florence, or Venice, history shows that a sound monetary standard is a necessary prerequisite for human flourishing, without which society stands on the precipice of barbarism and destruction”, 10. “Hyperinflation is a far more pernicious phenomenon than just the loss of a lot of economic value by a lot of people; it constitutes a complete breakdown of the structure of economic production of a society built up over centuries and millennia”, 22. Call it barter, or direct exchange. In an economy with no recognized medium of exchange, each good will have to be priced in terms of each other good, leading to a large number of prices, making economic calculations exceedingly difficult. The capitalist system is not a managerial system; it is an entrepreneurial system.” —Ludwig von Mises. “The combination of floating exchange rates and Keynesian ideology has given our world the entirely modern phenomenon of currency wars”, 79. These historical facts are still apparent in the English language, as the word pecuniary is derived from pecus, the Latin word for cattle, while the word salary is derived from sal, the Latin word for salt. Note: Also more unequal? “The majority of the technology we use in our modern life was invented in the 19th century, under the gold standard, financed with the ever-growing stock of capital accumulated by savers storing their wealth in a sound money and store of value which did not depreciate quickly”, 54. “It is ironic, and very telling, that in the era of government money, governments themselves own far more gold in their official reserves than they did under the international gold standard of 1871–1914”, 27. They are opposites? money whose supply is hard to increase is known as hard money, while easy money is money whose supply is amenable to large increases. “Whereas in a modern central bank the new money created goes to finance lending and government spending, in Bitcoin the new money goes only to those who spend resources on updating the ledger”, 96. Note: It could also make people risk averse and not invest enough? “The fundamental scam of modernity is the idea that government needs to manage the money supply. All that this redefinition of the meter has caused is ruin an engineer’s ability to properly build or maintain a house. differentiating between a good’s market demand (demand for consuming or holding the good for its own sake) and its monetary demand (demand for a good as a medium of exchange and store of value). Sound money is the basis for a functioning economy. Modern voters are unlikely to favor the candidates who are upfront about the costs and benefits of their schemes”, 88. delay his gratification to engage in risky production over a longer period of time is that these longer processes will generate more output and superior goods.

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