The Bitcoin Standard: The Decentralized Alternative to Central Banking

A precursory understanding of economics will make it clear that price controls are always counterproductive, resulting in surpluses and shortages. The problems faced by the American economy in the 1930s were inextricably linked to the fixing of wages and prices. Wages were set too high, resulting in a very high unemployment rate, reaching 25% at ce

Only silver comes close to gold in this regard, with an annual supply growth rate historically around 5–10%, rising to around 20% in the modern day. This is higher than that of gold for two reasons: First, silver does corrode and can be consumed in industrial processes, which means the existing stockpiles are not as large relative to annual product

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

French economist Jacques Reuff coined the phrase “deficit without tears” to describe the new economic reality that the United States inhabited, where it could purchase whatever it wanted from the world and finance it through debt monetized by inflating the currency that the entire world used.

The market demand for a bitcoin token comes from the fact that it is needed to operate the first (and so far, arguably only) functional and reliable digital cash system.11 The fact that this network was successfully operational in its early days gave its digital token a collectible value among tiny communities of cryptographers and libertarians, wh

For Mises, gold's monetary status was due to its fulfillment of the criteria for sound money as he understood them: [T]he sound money principle has two aspects. It is affirmative in approving the market's choice of a commonly used medium of exchange. It is negative in obstructing the government's propensity to meddle with the currency system.

To understand the significance of a technology for digital cash, it is instructive to look at the world before Bitcoin was invented, when one could neatly divide payment methods into two distinct non‐overlapping categories:

Satoshi Nakamoto's motivation for Bitcoin was to create a “purely peer‐to‐peer form of electronic cash” that would not require trust in third parties for transactions and whose supply cannot be altered by any other party. In other words, Bitcoin would bring the desirable features of physical cash (lack of intermediaries, finality of transactions) t

In all human history, we have never run out of any single raw material or resource, and the price of virtually all resources is lower today than it was in past points in history, because our technological advancement allows us to produce them at a lower cost in terms of our time.