The Bitcoin Standard

There are three fundamental reasons that drive the relationship between unsound money and war. First, unsound money is itself a barrier to trade between countries, because it distorts value between the countries and makes trade flows a political issue, creating animosity and enmity between governments and populations. Second, government having acce

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In The Sovereign Individual, James Davidson and William Rees‐Mogg argue that the modern nation‐state, with its restrictive laws, high taxes, and totalitarian impulses, has grown to a level of burdensome repression of its citizens' freedom comparable to that of the Church in the European Middle Ages, and just as ripe for disruption. With its heavy b

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In terms of the stock‐to‐flow ratio discussed in Chapter 1, the existing stockpiles of Bitcoin in 2017 were around 25 times larger than the new coins produced in 2017. This is still less than half of the ratio for gold, but around the year 2022, Bitcoin's stock‐to‐flow ratio will overtake that of gold, and by 2025, it will be around double that of

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The United States was to be the center of the global monetary system, with its dollars being used as a global reserve currency by other central banks, whose currencies would be convertible to dollars at fixed exchange rates, while the dollar itself would be convertible to gold at a fixed exchange rate. To facilitate this system, the United States w

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Today government‐approved economics curricula still blame the gold standard for the Great Depression. The same gold standard which produced more than four decades of virtually uninterrupted global growth and prosperity between 1870 and 1914 suddenly stopped working in the 1930s because it wouldn't allow governments to expand their money supply to f

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Whereas the American people were still prohibited from owning gold, the U.S. government promised to redeem dollars in gold to other countries' central banks at a fixed rate, opening what was known as the gold exchange window. In theory, the global monetary system was still based on gold, and if the U.S. government had maintained convertibility to g

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In other words, intermediated payments take away a significant share of the properties of money as a medium of exchange controlled by its owner, with high liquidity for him to sell whenever he wants. Of the most persistent characteristics of money historically are fungibility (any unit of money is equivalent to any other unit), and liquidity (abili

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The security of Bitcoin lies in the asymmetry between the cost of solving the proof‐of‐work necessary to commit a transaction to the ledger and the cost of verifying its validity. It costs ever‐increasing quantities of electricity and processing power to record transactions, but the cost of verifying the validity of the transactions is close to zer

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Government‐issued unsound money, however, can stall this process, keeping unproductive firms undead but not truly alive, the economic equivalent of zombies or vampires drawing on the resources of the alive and productive firms to produce things of less value than the resources needed to make them. It creates a new societal caste that exists accordi

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