The hobbyist is back with another book review. This time I am reviewing Mr. Ammous’s sequel to The Bitcoin Standard called The Fiat Standard.
HOW DID I FIND OUT ABOUT THIS BOOK?
Due to his great work with The Bitcoin Standard Saifedean Ammous is very well known in the Bitcoin space. As a Bitcoiner and apart of the overall Bitcoin community Mr. Ammous was talking about writing this book for quite some time before it was released. I believe in late 2021. All the podcasts (including my main go to Tales From The Crypt (TFTC) talked about this book. I am sure Bitcoin Magazine did its best to market this book. Overall this book was highly anticipated and Bitconers couldn’t wait to get thier hands on it. It took me some time to get to it due to my book backlog and busy life.
Book Details
Pages: 358 Store: Amazon.com Cost: $30.00. Medium sized font with decent space between sentences.
Summary
The forward by Ross Stevens is quite fitting. It sets the book up well for what readers are to expect. It didn’t over deliever nor did it bore you with banter that has no value to the overall book. Unlike Bitcoin is Venice (click here to read my review on that book) where Alex Gladstein completely got me hyped up for a great book only to be disappointed by the final turn page.
Overall Saife (yea this is my nickname for him. If Mr. Ammous ever reads this no disrespect sir) takes you on a journey on the fiat land. The book does a really good job explaning the beginnings of fiat money and how it has completly infested humanities way of life, thinking, and culture. Saife often mentions how this is truly a Bitcoin book that builds off of the Bitcoin Standard and this is his attempt to do an analysis of the overall fiat system. While Saife does give some evidence of how fiat solved problems with the gold standard monetary system and had some benefits to humanity, the majorty of the book is negative and just gives example after example of how unlimited money leaves human institutions’ in ruin.
Saife explains that fiat is created not by The Fed but by commerical banks loaning money into exisience. For example if you want a $1 million dollar loan to buy a house its new money that is created by the bank ledger. It is not a collection of money from the banks customers. Also this loan is treated as an asset of the bank.
The final few chapters of the book bring it back to Bitcoin and why it is much better than the current system. Saife bullish case for Bitcoin is that it overtakes the world bond (debt!) market. With over $100+ Trillion worth of sovereign (government) debt that is producing negative yield Saife thinks the world will shift from a debt based system where the asset is a promise for somone else to pay to an equity/savings based system where you pledge Bitcoin and with it being a bear asset (meaning no one has to pay you back for it to have its base value when received) you are certain your purchasing power is protected throughout time.
TBH: MAIN TAKEAWAY
Saife’s writing is easy to digest. The words flow off the page and into my brain with ease thus making information retention easy. Since I do have bias being a Bitcoiner, the point of view Saife’s brings I agree with about 90% of them. Now Saife’s isn’t as “toxic” as some Bitcoin maximalists but he very strong on his opinions and doesn’t care if his words hurt your feelings. The 4 topics that jump off the page and remain with me are as follows:
- Saife does an excellent job explaining what salability is.
During my Bitcoin journey I saw this word many times but I never grasp how important it was and how Bitcoin can solve this issues of salability accross space. Saife gives a great example of moving gold across the Atlanatic Ocean. The way I understand it is if you had $100 in gold and it cost you $10 to ship it from London to Atlanta, the receiver in Atlanta will have lost 10% of its value due to shipping costs. While with Bitcoin no matter the value you pay the fee that will get you into the 1MB block which is independent of the value of the Bitcoin sent. So if gold has a 10% shipping charge that only goes up as you increase the distance and the value of the gold the salability isn’t as strong as it is for Bitcoin. For this I have a much better understanding of why salability is so important and thus part of the reason why fiat was born and works to solve this very problem.
2. I really like Saife breakdown fiat’s impact on food and education.
It is clear how our food has gotten worse over time. I saw photos of people on the beach in the 1970 on Twitter when money was some what sound. Saife does a good job explaning the push to grains sugar and corn which was all based upon the short term profit motive with some religious overtones to help the masses move away from animal proteins. One thing he missed was the exploitation of meat production as well. How chicken, beef, and pork are injected with water and hormones to make them the fattest to get the most profit and how fish is so toxic due to the lack of concern for the environment you have to monitor the amount you eat to avoid mercury poisoning.
Saife nails it when it comes to higher education. Due to government loans and the printing press to pursue what ever science they wish to decree colleges have no care for the studetns it is all about research, getting grants, and getting students to take out huge loans for worthless degrees. Being college educated myself I saw this first hand. Professors could care less if you learn or not its all about getting published and getting more grants to the school. For students colleges will bend over backwards have you change your major just to keep you eligbile and capture that tuition money.
3. Saife mentions why no progress to flight speed.
This one really caught my attention. As someone who flies quite often I often wondered why have planes basically looked the same since the 1970s and no improvements in pushing speed barriers and overall innovation in the space. Now planes are very sophisciated now versus 1970 with wifi, and other amenedites to make the flight more comfortable but from a form and speed factor basically nothing. Saife mentions on page 191
“ The world speed record for flight was constantly increasing from the Wright brothers’ maiden flight in 1903 until July 28, 1976, when a U.S. Air Force SR-71 Blackbird registered the fastest speed for an air-breathing aircraf: 3,529.6 kmh, or Mach 3.3. On that same day, another SR-71 registered the hightest airplane altitude record of 25,929 meters. Forty-five years later, both records still stand.”
Saife reasoning for this make sense the. The inflation caused by the closing of the gold window in 1971 caused the price of durable goods and fuel to rise. Then it became evil for humans to consume dirty energy the possibility to push the innovation envelope wasn’t there. Which is a shame
4. Bitcoin for the masses will be different than how the maxis would prefer
The example Saife gives is beautiful when it comes to people taking control of their Bitcoin private key. Saife relates this to other tasks that we take for granted that no one tries to do themselves. For example expecting everyone to butcher their own meat or milk their own cow isnt realistic. People will always want a solution that works best for them. Some might want to leave thier Bitcoin with a Bitcoin bank others might be more extreme and use old laptops with backup CDs. Once the network full develops companies will rise that will meet the demand of the customers and I am sure we will have a blend of custody soultions that will meet the wider consumer base needs.
Fiat apologists mention how far humans have come with the status quo. All the people lifted out of poverty, the advancement of science, technology, and healthcare all happened under a fiat standard. Shoot even Bitcoin was founded in this dark age of money. I wouldn’t expect Saife to give any credit to the current system but we have to acknowledge what humanity was able to do while the debt based ponzi marched on with the dollar leading the way leaking value every year and causing the future to be even more uncertain. I am sure other topics Saife mentioned that I don’t agree with but overall this is my main critique.
RANKINGS AND RECOMMENDATION
⭐️⭐️⭐️⭐️⭐️
This is a great book. I highly recommend it for any Bitcoiner or anyone who wants an engineers/ Austrian economist’s take on how the fiat standard works. You don’t need to read Saife’s first book to understand this one. If you do read this book first then circle back and read The Bitcoin Standard for further context on Saife’s position. This book is easy to ready and tries to make sense of a world that doesn’t have any.
I come away feeling where would we be today if the money is sound and people had away to save without playing the stock market casino and greedy banks blowing up the system and being bailed out for their greed.
Thank you for taking the time to read this post! For a free 500 sats scan the QR code below with a lightning wallet (only one scan available).
Hobbyist Out!
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