Bitcoinist Book Club: “The Bitcoin Standard” (Chapter 9, Part 1, Buy The Future)
Back to The Bitcoin Standard, today we’ll explain this sentence: “Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased, no matter how much its value rises.” This is not a trivial matter, in fact, it’s one of the defining characteristics of the network. The world tends towards a bitcoin standard because bitcoin is perfect money. It’s the answer to a problem humanity’s been struggling with for ages. And the fact that it can’t and won’t be debased is a big part of the winning equation.
Let’s dive into The Bitcoin Standard, but first…
About The Coolest Book Club On EarthThe Bitcoinist Book Club has two different use cases:
1.- For the superstar-executive-investor on the run, we’ll summarize the must-read books for cryptocurrency enthusiasts. One by one. Chapter by chapter. We read them so you don’t have to, and give you just the meaty bits.
2.- For the meditative bookworm who’s here for the research, we’ll provide liner notes to accompany your reading. After our book club finishes with the book, you can always come back to refresh the concepts and find crucial quotes.
Everybody wins.
So far, we’ve covered:
- Prologue and Chapter 1
- Primitive Moneys (Chapter 2)
- Why Gold? (Chapter 3, Part 1)
- History (Chapter 3, Part 2)
- Gold Standard (Chapter 4, Part 1)
- Government Money (Chapter 4, Part 2)
- Money and Hyperinflation (Chapter 4, Part 3)
- Time Preference (Chapter 5, Part 1)
- Capital Accumulation (Chapter 5, Part 2)
- Price (Chapter 6, Part 1)
- Unsound Money (Chapter 6, Part 2)
- Economic Thought (Chapter 7, Part 1)
- Inflation (Chapter 7, Part 2)
- Digital Money (Chapter 8, Part 1)
- Proof-Of-Work (Chapter 8, Part 2)
Some say “time is money,” but the fact of the matter is you can recover money, but never time. And all of the governments print money non-stop. The arrow of time, though, moves forward and only forward.
“What constitutes the practical and realistic limit to the quantity of any resource is always the amount of human time that is directed toward producing it, as that is the only real scarce resource (until the creation of Bitcoin).”
As we told you, this is not a trivial matter. The bitcoin standard is inevitable because:
“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.”
So, “human time is finite, everything else is practically infinite, and more of it can be produced if more human time is directed at it.” Each unit of something automatically makes all the others in existence worth less. If that’s a fact, and it was until recently, how can humans store the value they produce?
Until bitcoin, gold was the most satisfying answer to that question. However, “the rarest metal in the crust of the earth, gold, has been mined for thousands of years and continues to be mined in increasing quantities as technology advances over time.” And remember, since gold is practically indestructible, newly mined gold has to compete with all of the gold already in existence and vice versa.
This is where bitcoin shines. That is why we’re moving forward toward a bitcoin standard.
BTC price chart for 08/22/2022 on Bitstamp | Source: BTC/USD on TradingView.com There Can Only Ever Be 21 MillionBitcoin’s capped supply means “digital scarcity:”
“This sheds some light on an astonishing facet of the technical accomplishment that is Bitcoin. For the first time, humanity has recourse to a commodity whose supply is strictly limited. No matter how many people use the network, how much its value rises, and how advanced the equipment used to produce it, there can only ever be 21 million bitcoins in existence.”
Bear in mind that “digital scarcity” is a phenomenon that was discovered instead of invented, and can only be discovered once. All of the other coins are trying to create “more digital scarcity,” which doesn’t make sense. “Bitcoin, by not having any physical presence, and being purely digital, is able to achieve strict scarcity. No divisible and transportable physical material had ever achieved this before.”
Bitcoin is digital scarcity. And it features another important characteristic that foreshadows the bitcoin standard:
“Because each bitcoin is divisible into 100 million satoshis, there is plenty of room for the growth of Bitcoin through the use of ever-smaller units of it as the value appreciates. This creates a new type of asset well-suited for playing the role of store of value.”
Individual Sovereignty And The Bitcoin StandardBitcoin implies a peaceful revolution, something that wasn’t possible before its invention
“Bitcoin, and cryptography in general, are defensive technologies that make the cost of defending property and information far lower than the cost of attacking them. It makes theft extremely expensive and uncertain, and thus favors whoever wants to live in peace without aggression toward others.”
The fact of the matter is that “Bitcoin provides a cost-effective option for people needing to get around government restrictions on the banking sector.” If the bitcoin standard “grows and succeeds, it will be for its own merits as a peaceful neutral technology for money and settlement, not through it being forced on others.” This is a once-in-a-lifetime opportunity for mankind.
“Any person who owns Bitcoin achieves a degree of economic freedom which was not possible before its invention. Bitcoin holders can send large amounts of value across the planet without having to ask for the permission of anyone. Bitcoin’s value is not reliant on anything physical anywhere in the world and thus can never be completely impeded, destroyed, or confiscated by any of the physical forces of the political or criminal worlds.”
The bitcoin standard is coming, it’s inevitable, and it will not be forced on anyone. How beautiful is that?
Featured Image: The Bitcoinist Book Club logo | Charts by TradingViewOhNoCryptocurrency via https://www.ohnocrypto.com/ @Eduardo Próspero, @Khareem Sudlow