The Bitcoin Standard: The Decentralized Alternative to Central Banking

But with the suspension of the gold standard, running out of financing was not enough to end the war; a sovereign had to run out of its people's accumulated wealth expropriated through inflation.

When comparing prices of goods and services to the value of government money and gold, we find a significant rise in their prices as expressed in government money, but relative stability in their prices in gold. The price of a barrel of oil, for instance, which is one of the key commodities of modern industrial society, has been relatively constant

When money was nationalized, it was placed under the command of politicians who operate over short time‐horizons of a few years, trying their best to get reelected. It was only natural that such a process would lead to short‐term decision making where politicians abuse the currency to fund their reelection campaigns at the expense of future generat

Over the past seven decades with relatively reliable statistics, this growth rate has always been around 1.5%, never exceeding 2%.

Bitcoin already appears to satisfy all the requirements of Menger, Mises, and Hayek: it is a highly salable free‐market option that is resistant to government meddling.

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 total U.S. M2 measure of the money supply in 1971 was around $600 billion, while today it is in excess of $12 trillion, growing at an average annual rate of 6.7%. Correspondingly, in 1971, 1 ounce of gold was worth $35, and today it is worth more than $1,200.

As Friedrich Hayek put it: I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop.

The relative difficulty of producing new monetary units determines the hardness of money: money whose supply is hard to increase is known as hard money, while easy money is money whose supply is amenable to large increases.