The Bitcoin Standard

I just finished reading the last pages of The Bitcoin Standard, and I’m a bit conflicted about it. Obviously, Samedian Ammous is a great mind and deserves a ton of credit for the work he’s done as an advocate and professor, however the book has left a bit of bitter taste in my mouth. I’m not sure whether it’s because he challenges a lot of my progressive ideals, or whether he’s really as insufferable as he seems.

On the one hand, I have to admire the man for being so sure of his beliefs. He is fanatical in some respects. The way in which he regards his ideological opponents, Keynesians, Leftists, and most of the crypto community with disdain, is something to behold. If I could only dismiss opposing viewpoints with such aplomb… the wonder!

His sound money premise seems logical, and he does a good job carrying the torch for the Austrian school. His interpretation of the history of money and is solid, and he stakes his interpretation for the last two hundred years with much conviction. I’ll admit that the ramifications if he’s correct are quite dire, and offer a plausible explanation for the past hundred years of monetary policy. And seem to offer a roadmap for what comes next.

And if he is correct, then it means that the direction and role of bitcoin as an alternative to the current fiat system is ordained, and gives me even stronger incentive to go all in and hodl, hodl, hodl.

One of the most important points that he makes (and he stressed this during the recent interview with Laura Shin,) is the comparison of high versus low time preference. High time preference is of shorter duration than lower preference, and Ammous provides historical evidence of unsound money systems being tied to lower time preferences.

Unfortunately, a good deal of the book is filled with Ammous’s moral judgements of everyone he disagrees with. Keynes is a “libertine” who never studied economics, and apparently a pederast. Milton Friedman and others are treated harshly as well, but perhaps the most cringe sections of the book is where he rails on “modern” art, and pop music, notably Miley Cyrus, dismissing their lack of skill or craft compared to Michelangelo and Bach. It has a distinct “get off my lawn” flavor.

His hatred toward the authoritarians of the twentieth century leaves no room for communists, socialists, and by extension, liberals and progressives. Everyone who might disagree with him gets similar treatment. It is totally on-brand for Ammous, given his reaction to the Coronavirus lockdown on Twitter.

It’s a shame, really, as it seems to spoil much of the book, and probably puts off a lot of readers. I’m sure Ammous could care less, as he has enough fans and acolytes of his worldview. Still, I’m left wondering if there is a gentler, less irascible version of this book out there. The historical presentation is A+, but the high-mindedness I could do without.

Lastly, he does dismiss almost all of the crypto community, especially the “blockchain, not bitcoin” crowd. The only purpose of blockchain is for digital cash, he argues, and all other implementations of it are a waste. Ethereum and other altcoins are waved away as useless since they do not share the main quality that makes bitcoin important: its lack of centralized control. Bitcoin is what it is because of the way which it was brought into the world and released to the wild. Ammous says that no one will ever be able to change the immutable characteristics of bitcoin, the consensus mechanism, the emission rate (block rewards and halvings,) or even the block size. He makes an exception on the possibility of SHA-256 becoming vulnerable at some point in time and requiring a fork, but that’s waved off because of the economic vulnerability.

In all, the book is worth a read if you can stand having your assumptions challenged in such a sanctimonious way. I don’t know if I would recommend it to someone as an introduction to bitcoin, since it is so dense. For those already well down the rabbit hole, it does help fill the gaps in why bitcoin is destined to be the sovereign currency of the internet, and possibly even the world of the twenty first century and beyond.

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