The Bitcoin Standard

In his book The Bitcoin Standard, Saifedean Ammous presents a compelling case for the value and importance of Bitcoin. He outlines several key reasons why Bitcoin is a positive development for the global financial system and beyond. Here are six of these reasons, as explained by Ammous:

1. Decentralization: According to Ammous, one of Bitcoin’s core strengths is its decentralized nature. Unlike traditional currencies, which central banks and governments control, Bitcoin operates on a peer-to-peer network without central authority. This decentralization makes it resistant to manipulation, censorship, and corruption, promoting financial freedom and sovereignty for its users.
2. Scarcity: Ammous emphasizes the importance of Bitcoin’s scarcity. With a fixed supply cap of 21 million coins, Bitcoin is designed to be a deflationary currency. This scarcity is enforced by the protocol’s mining difficulty adjustment, which ensures that new bitcoins are released at a predictable and decreasing rate. This scarcity gives Bitcoin value and makes it an attractive store of wealth, similar to gold.
3. Immutability: Ammous highlights another key feature of Bitcoin: its immutability. Once a transaction is recorded on the Bitcoin blockchain, it cannot be altered or reversed. This immutability provides a high degree of security and trust in the system, as users can be confident that their transactions are final and cannot be tampered with.
4. Divisibility: Ammous also points out the benefits of Bitcoin’s divisibility. Each bitcoin can be divided into 100 million smaller units called satoshis, making it highly divisible and accessible to users of all income levels. This divisibility allows for micro-transactions and opens up new global commerce and financial inclusion possibilities.
5. Permissionless: The Bitcoin network is permissionless, meaning anyone can participate without needing approval from any central authority. Ammous argues that this openness and accessibility are key advantages of Bitcoin over traditional financial systems, which often have high barriers to entry and exclusionary practices.
6. Sound money: Finally, Ammous sees Bitcoin as a form of sound money, with properties that make it superior to fiat currencies. Its predictable supply, resistance to inflation, and independence from government control make it a reliable store of value and a hedge against economic instability. By adopting Bitcoin as the global currency standard, Ammous believes we can create a more stable and prosperous financial system.

Saifedean Ammous’s The Bitcoin Standard provides a comprehensive and persuasive argument for Bitcoin’s value. By highlighting its decentralization, scarcity, immutability, divisibility, permissionless nature, and sound money properties, Ammous makes a strong case for Bitcoin’s potential to revolutionize the global financial system and promote economic freedom and prosperity.