Bitcoinist Book Club: “The Bitcoin Standard” (Chapter 9, Part 1, Buy The Future)
Back to The Bitcoin Standard, today we will explain this sentence: “Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium that is guaranteed not to degrade, no matter how much its value rises.” This is not a trivial matter, in fact, it is one of the defining characteristics of the network. The world is trending towards a bitcoin standard because bitcoin is the answer to a problem humanity has struggled with for ages. And the fact that it cannot and will not degrade is a big part of the winning equation.
Let’s dive into the Bitcoin Standard, but first…
About the coolest book club on earth
Bitcoinist Book Club has two different use cases:
1.- For the superstar-executive-investor on the run, we will summarize the must-read books for cryptocurrency enthusiasts. One after another. Chapter by chapter. We read them so you don’t have to, and just give you the meaty bits.
2.- For the meditative bookworm who is here for the research, we will provide liner notes to accompany the reading. After our book club finishes the book, you can always come back to refresh the concepts and find important quotes.
Everyone wins.
So far we have covered:
- Prologue and Chapter 1
- Primitive money (Chapter 2)
- Why gold? (chapter 3Part 1)
- History (chapter 3part 2)
- Gold standard (Chapter 4Part 1)
- Government money (Chapter 4part 2)
- Money and hyperinflation (Chapter 4part 3)
- Time preference (Chapter 5Part 1)
- Capital accumulation (Chapter 5part 2)
- Price (Chapter 6Part 1)
- Unhealthy money (Chapter 6part 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)
And now, let’s go back to The Bitcoin Standard: “Chapter 9, Part 1: Buy the Future”
Some say “time is money”, but the fact is you can get money back, but never time. And all the authorities print money non-stop. However, the arrow of time 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 directed to producing it, since 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 of human history, we have never run out of any single commodity or resource, and the price of virtually all resources is lower today than it was at any time in history, because our technological advances allow us to produce them at a lower level . cost in relation to our time.”
So, “human time is limited, everything else is practically infinite, and more of it can be produced if more human time is directed toward it.” Each unit of something automatically makes all the others in existence worth less. If that is a fact, how can humans effectively store the value they produce?
Until bitcoin, gold was the most satisfying answer to that question. But “the rarest metal in the Earth’s crust, gold, has been mined for thousands of years and continues to be mined in increasing amounts as technology advances over time.” And remember, since gold is practically indestructible, newly mined gold must compete with all the gold that already exists and vice versa.
This is where bitcoin shines. That is why we are moving forward towards a bitcoin standard.
BTC price chart for 08/22/2022 on Bitstamp | Source: BTC/USD on TradingView.com
It can only ever be 21 million
Bitcoin’s Limited Supply Means “Digital Scarcity:”
“This sheds some light on an astonishing facet of the technical achievement that is Bitcoin. For the first time, humanity has resorted to a commodity whose supply is strictly limited. No matter how many people use the network, how much its value increases, and how advanced the equipment is used for to produce it, only 21 million bitcoins can exist.”
Remember that “digital scarcity” is a phenomenon that was discovered rather than invented and can only be discovered once. All the other coins are trying to create “more digital scarcity”, which makes no sense. “Bitcoin, by having no 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 has another important feature that foreshadows the bitcoin standard:
“Because each bitcoin is divisible into 100 million satoshis, there is plenty of room for growth of Bitcoin through the use of ever smaller units of it as its value increases. This creates a new type of asset that is well-suited to play the role of a store of value. “
Individual Sovereignty and the Bitcoin Standard
Bitcoin implies a peaceful revolution, which was not 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, thus favoring those who want to live in peace without aggression towards others .”
The point is that “Bitcoin provides a cost-effective alternative for people who need to circumvent 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 its imposition on others.” This is a once-in-a-lifetime opportunity for humanity.
“Any person who owns Bitcoin achieves a degree of financial freedom that was not possible before its invention. Bitcoin holders can send large amounts of value across the planet without having to ask permission from anyone. Bitcoin’s value is not dependent on anything physical anywhere in world and therefore can never be completely obstructed, destroyed or confiscated by any of the physical forces of the political or criminal world.”
The Bitcoin standard is coming, it’s inevitable, and it won’t be forced on anyone. How beautiful is that?
Featured Image: The Bitcoinist Book Club logo | Charts by TradingView
