Hello and Welcome. This page is a collection of 23 quotes that I liked and saved while reading The Bitcoin Standard book by Saifedean Ammous. I hope you will like them too.
By the way, I am Deepak Kundu, an avid book reader, quotes collector and blogger.
The Bitcoin Standard Quotes
- Bitcoin will go through hiccups. It may fail; but then it will be easily reinvented as we now know how it works. In its present state, it may not be convenient for transactions, not good enough to buy your decaffeinated espresso macchiato at your local virtue‐signaling coffee chain. It may be too volatile to be a currency for now. But it is the first organic currency. But its mere existence is an insurance policy that will remind governments that the last object the establishment could control, namely, the currency, is no longer their monopoly. This gives us, the crowd, an insurance policy against an Orwellian future.
- Rational markets do not require any individual trader to be rational. In fact they work well under zero intelligence – a zero‐intelligence crowd, under the right design, works better than a Soviet‐style management composed of maximally intelligent humans.
- Bitcoin is an excellent idea. It fulfills the needs of the complex system, not because it is a cryptocurrency, but precisely because it has no owner, no authority that can decide on its fate. It is owned by the crowd, its users. And it now has a track record of several years, enough for it to be an animal in its own right.
- While Bitcoin is a new invention of the digital age, the problems it purports to solve – namely, providing a form of money that is under the full command of its owner and likely to hold its value in the long run – are as old as human society itself.
- Bitcoin is the newest technology to serve the function of money – an invention leveraging the technological possibilities of the digital age to solve a problem that has persisted for all of humanity’s existence: how to move economic value across time and space.
- Free‐market monetary competition is ruthlessly effective at producing sound money, as it only allows those who choose the right money to maintain considerable wealth over time. There is no need for government to impose the hardest money on society; society will have uncovered it long before it concocted its government, and any governmental imposition, if it were to have any effect, would only serve to hinder the process of monetary competition.
- A money that is easy to produce is no money at all, and easy money does not make a society richer; on the contrary, it makes it poorer by placing all its hard‐earned wealth for sale in exchange for something easy to produce.
- The gold standard allowed for unprecedented global capital accumulation and trade by uniting the majority of the planet’s economy on one sound market‐based choice of money. Its tragic flaw, however, was that by centralizing the gold in the vaults of banks, and later central banks, it made it possible for banks and governments to increase the supply of money beyond the quantity of gold they held, devaluing the money and transferring part of its value from the money’s legitimate holders to the governments and banks.
- 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.
- Hyperinflation is a form of economic disaster unique to government money. There was never an example of hyperinflation with economies that operated a gold or silver standard, and even when artifact money like seashells and beads lost its monetary role over time, it usually lost it slowly, with replacements taking over more and more of the purchasing power of the outgoing money. But with government money, whose cost of production tends to zero, it has become quite possible for an entire society to witness all of its savings in the form of money disappear in the space of a few months or even weeks.
- The problem with government‐provided money is that its hardness depends entirely on the ability of those in charge to not inflate its supply. Only political constraints provide hardness, and there are no physical, economic, or natural constraints on how much money government can produce. Cattle, silver, gold, and seashells all require serious effort to produce them and can never be generated in large quantities at the drop of a hat, but government money requires only the fiat of the government.
- History has shown that governments will inevitably succumb to the temptation of inflating the money supply. Whether it’s because of downright graft, “national emergency,” or an infestation of inflationist schools of economics, government will always find a reason and a way to print more money, expanding government power while reducing the wealth of the currency holders.
- Gold has clearly not lost its monetary role; it remains the only final extinguisher of debt, the one money whose value is not a liability of anyone else, and the prime global asset which carries no counterparty risk.
- Government control of money has turned money from being the reward for producing value to the reward for obedience to government officials. It is impractical for anyone to develop wealth in government money without government acceptance. Government can confiscate money from the banking monopolies it controls, inflate the currency to devalue holders’ wealth and reward it to the most loyal of its subjects, impose draconian taxes and punish those who avoid them, and even confiscate bills.
- The move from money that holds its value or appreciates to money that loses its value is very significant in the long run: society saves less, accumulates less capital, and possibly begins to consume its capital; worker productivity stays constant or declines, resulting in the stagnation of real wages, even if nominal wages can be made to increase through the magical power of printing ever more depreciating pieces of paper money. As people start spending more and saving less, they become more present‐oriented in all their decision making, resulting in moral failings and a likelihood to engage in conflict and destructive and self‐destructive behavior. This helps explain why civilizations prosper under a sound monetary system, but disintegrate when their monetary systems are debased, as was the case with the Romans, the Byzantines, and modern European societies.
- Sound money is an essential requirement for individual freedom from despotism and repression, as the ability of a coercive state to create money can give it undue power over its subjects, power which by its very nature will attract the least worthy, and most immoral, to take its reins.
- A theoretically ideal money would be one whose supply is fixed, meaning nobody could produce more of it. The only noncriminal way to acquire money in such a society would be to produce something of value to others and exchange it with them for money. As everyone seeks to acquire more money, everyone works more and produces more, leading to improving material well‐being for everyone, which in turn allows people to accumulate more capital and increase their productivity. Such a money would also work perfectly well as a store of value, by preventing others from increasing the money supply; the wealth stored into it would not depreciate over time, incentivizing people to save and allowing them to think more of the future.
- This property is why gold has been synonymous with sound money: it is money whose supply is guaranteed, thanks to the ironclad rules of physics and chemistry, to never be significantly increased. Try as they might, humans have for centuries failed to produce a form of money more sound than gold, and that is why it has been the prime monetary instrument used by most human civilizations throughout history.
- If saving creates the possibility of capital accumulation and civilizational advance, debt is what can reverse it, through the reduction in capital stocks across generations, reduced productivity, and a decline in living standards. Whether it is housing debt, Social Security obligations, or government debt that will require ever‐higher taxes and debt monetization to refinance, the current generations may be the first in the western world since the demise of the Roman Empire (or, at least, the Industrial Revolution) to come into the world with less capital than their parents.
- Prices, then, are not simply a tool to allow capitalists to profit; they are the information system of economic production, communicating knowledge across the world and coordinating the complex processes of production. Any economic system that tries to dispense with prices will cause the complete breakdown of economic activity and bring a human society back to a primitive state.
- Central bank planning of the money supply is neither desirable nor possible. It is rule by the most conceited, making the most important market in an economy under the command of the few people who are ignorant enough of the realities of market economies to believe they can centrally plan a market as large, abstract, and emergent as the capital market. Imagining that central banks can “prevent,” “combat,” or “manage” recessions is as fanciful and misguided as placing pyromaniacs and arsonists in charge of the fire brigade.
- For those of us alive today, raised on the propaganda of the omnipotent governments of the twentieth century, it is often hard to imagine a world in which individual freedom and responsibility supersede government authority. Yet such was the state of the world during the periods of greatest human progress and freedom: government was restrained to the scope of protection of national borders, private property, and individual freedoms, while leaving to individuals a very large magnitude of freedom to make their own choices and reap the benefits or bear the costs.
- The fundamental scam of modernity is the idea that government needs to manage the money supply. It is an unquestioned starting assumption of all mainstream economic schools of thought and political parties. There isn’t a shred of real‐world evidence to support this contention, and every attempt to manage the money supply has ended with economic disaster. Money supply management is the problem masquerading as its solution; the triumph of emotional hope over hard‐headed reason; the root of all political free lunches sold to gullible voters. It functions like a highly addictive and destructive drug, such as crystal meth or sugar: it causes a beautiful high at the beginning, fooling its victims into feeling invincible, but as soon as the effect subsides, the come‐down is devastating and has the victim begging for more. This is when the hard choice needs to be made: either suffer the withdrawal effects of ceasing the addiction, or take another hit, delay the reckoning by a day, and sustain severe long‐term damage.