The Most Influential Bitcoin Book 📚
💡 Daily Reminder: Stay humble, stack sats
Bitcoiners,
With over 5,000+ reviews and nearly 5 stars on Amazon, The Bitcoin Standard by Saifedean Ammous is considered the most influential book yet written about Bitcoin.
Here are 10 takeaways from the book about the history of money, money's role in society, and Bitcoin:
What is money?
Money aims to solve a problem that has existed since the beginning of humanity: how to move economic value across time and space.
Money serves as a medium of exchange between two parties.
A widely accepted medium of exchange is called money.
The properties of money
Sound money is chosen in the free market based on Salability, which depends on:
Time - holding value across millennia
Space - the ability to transfer value across distance
Scale - the ability to be divided into smaller units or added into bigger units
Primitive forms of money
Money has evolved.
Seashells acted as money, especially the ones that were scarcer and harder to find.
Cattle were cherished for their nutritional value.
Salt was easy to keep for long durations and could be easily divided into smaller units.
Metals used as money
Metals were naturally selected as money due to their durability, physical properties, and relative abundance.
Gold, silver, and copper emerged as the most popular.
These metals were made into coins to easily verify their respective weight and purity.
Gold used as money
Gold has been used as the primary form of money from 2,500 years ago until the 20th century.
Gold emerged as the winner for 2 primary reasons:
Impossible to destroy
Impossible to synthesize from other materials
Fiat used as money
Paper claims on gold were used to easily transfer wealth across space.
In 1971, President Nixon announced the end of dollar convertibility to gold.
Since then, fiat money tied to governments instead of gold became the new standard used in civilization.
Money used as information
Economic actors engage in economic planning and calculation using money.
If money is corrupted, individuals cannot make rational decisions by examining the prices of the goods involved.
Money used to fund war
On a gold standard, the government's war effort was limited by the taxes it could collect.
On a fiat standard, governments can debase their currency to pay for wars.
Unlimited war funding leads to proxy wars not in the interest of the citizens.
The rise of digital money
Nowadays, banks leverage computers for payments and record keeping.
Money can easily be electronically transmitted across countries, however, the record-keeping is sloppy which leads to higher levels of inflation like we are currently experiencing.
Bitcoin used as money
Bitcoin takes the best qualities of prior forms of money and combines them to make superior money for the digital age.
Bitcoin is good for:
Store of value
Online settlements
Individual sovereignty
Global unit of account
The author posted a link to download The Bitcoin Standard for free:
Happy Sunday,
-Pod
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Eric Podwojski
Founder, Bitcoin EDU
Twitter: @epodrulz
Disclaimer: This should go without saying: This is not financial advice. This is not investment advice. I write this newsletter for education and entertainment. Act accordingly.
