SLP1 – Bitcoin as Sound Money with Saifedean Ammous, Austrian Economist

Posted in: bitcoin Posted on

Stephan interviews Saifedean Ammous, Austrian Economics Professor and author of The Bitcoin Standard. In this podcast episode we take a deep dive into the case for Bitcoin as sound money, and what is potentially the hardest money the world has ever seen.

We discuss:

  • Bitcoin as Sound Money
  • Why using the hardest money is not a choice
  • Why Bitcoin is difficult to change, and why that’s a good thing
  • How Bitcoin may proceed through various stages on a path to becoming the global standard for value
  • Fractional Reserve Banking vs Full Reserve Banking in a Bitcoin Standard world

Saifedean links:

Stephan Livera links:

Stephan Livera:

Okay guys, welcome to the first show. For the first guest, we’ve got Saifedean Ammous. He’s an Austrian economist. He’s a professor at the Lebanese American university. And most importantly, he’s the author of this book that I’m holding right here. It’s The Bitcoin Standard. And I think this is a very, very important book. And what Saifedean has really done with this book is he’s really combined the insights and presented and understanding of Bitcoin that incorporates all these different facets in a way that nobody has done up to now in terms of in the Bitcoin and cryptocurrency world. So welcome Saifedean.

Saifedean Ammous:

Thank you so much for having me, Stephan. It’s fun talking to you always.

Stephan Livera:

Thank you. Thank you Saifedean. Yeah, so I think some of the really interesting things I’ve found, about your book is that you were really able to combine the insights and present them across so many different kind of Austrian economists. And I think some of the key ones we’ve got Mises. We’ve got Menger, we’ve got Rothbard, we’ve got people like Guido Hulsmann, Hoppe. And also guys like Julian Simon as well. And I think along with some of your contributions as well that have, or some of your sort of focuses, if you will. And one of them was around, you know, Bitcoin’s block difficulty adjustment and the stock to flow ratio. So I thought there were a few really key points that I got out of my reading of your book. But maybe let’s start with just a bit of a basic question. What is sort of, what is the basic case for Bitcoin as sound money and you know, what is saleability and why does that matter?

Saifedean Ammous:

Yes. So the way that I would look at it if you, if you study Austrian economists and you see what their conception of sound money is. You’ll see that, you know, even though pretty much all of them spoke about gold as money, you know, it was not gold for the sake of gold. It was because of Gold’s economic properties that it fulfilled certain characteristics, which made it sound money. In other words, gold’s physical and chemical properties ensured that it’s remained always. A good that had a high stock to flow ratio. In other words, the stockpile of existing gold in the world was always very large quantity to the marginal production every year. And so the new supply of gold was never very high, so it was never inflationary and it never increased in supply. The very high amount that in turn is what gave gold.

Saifedean Ammous:

It’s saleability. In other words, it’s acceptability as a store of value and as a medium of exchange. And so the Austrian definition of sound money is not that money has to be a yellow shiny metal. Rather it’s that money is something that is widely accepted as a store of value and minimum of exchange. In other words, the concept of contestability refers to the idea that because something is desirable as a store of value, people want to hold a lot of it and a lot of people want to hold a lot of it and so people will then be willing to accept it as a means of payment because of their willingness to hold it. In other words, when people choose to buy or sell it or in other words, when people choose to exchange it for other goods, they find that there are a lot of others who are willing to buy and sell it. In other words, if you’re looking to buy food, you’ll find that the people who won’t have food are willing to accept that money.

Stephan Livera:

Yep, readily easy to exchange.

Saifedean Ammous:

Exactly. And, for me that comes down to the fact that I mean the reason that something would be saleable, it would be accepted is fundamentally, you know, we can go back to a lot of the physical characteristics that make something desirable and you know, transportability and divisibility and so on. These were quite important in the past. But you know, in the modern world with modern industrialization, we can make anything into whatever form we want. It’s not that difficult. So what ends up really, I mean, we can give different materials, different physical and chemical properties. what ends up being the most telling factor in whether something ends up being money or not is its ability to store value across time. Once something is good at storing value across time, people want to hold it for the long run and then people start accepting payments in it and start using it in payment.

Saifedean Ammous:

And so the point is that if you want to sell a quantity of this good, because it is widely held by everybody as a store of value. When you decide to sell a quantity of it, you’re least likely to move the market effectively because a lot of people have a lot of it and so you start to sell some of yours, there will be many, many buyers looking to buy it or if you’re trying to buy some of yours, there will be many sellers looking to sell it because a lot of people hold a lot of it.

Stephan Livera:

And I think that’s a key point that you bring up there, because some people will point at “Oh look, Bitcoin is so volatile”, but really they’re not appreciating in my view what is a very small drop in the bucket. It’s a drop in the bucket compared to the ocean of the rest of the world. So do you have any comments around what we might hypothesize about Bitcoin volatility going forward?

Saifedean Ammous:

Yeah, I mean the way that I see it is that considering the Bitcoin has only been around for nine years, the fact that it is at this kind of volume and that it offers this kind of liquidity is astonishing so far. So the fantasy of having a money that grows from zero to being the prime monetary asset of the entire planet and does so smoothly is obviously impossible. The markets still work like that. It won’t just increase at a set rate of, say 5% per day every day. That it’s predictable. Because if we knew that that was the case, then people would pile on, speculate on it and that would make it rise even more. But then, you know, it’ll rise above the trend. It’ll fall down. It can essentially, markets can function according to a predictable plan.

Saifedean Ammous:

And that’s why I think all of these attempts to create digital currencies that are stable in value are doomed because they know value is not something that can be decreed. It’s something that emergens. And the emergence process cannot be smooth and orderly. It has to, it grows one convicted HODLer at a time. So you know, more people hold it more people in the cycle, but in a way that raises the price. But that can’t be a smooth process because we don’t know how many people, choose to enter this every day. But the fundamental value there, that I think Bitcoin is worth paying attention to is that I think it has the fundamental characteristic that we’re driving towards being a widely accepted the medium exchange and store of value. And that is that it’s supply grows at a slow rate.

Saifedean Ammous:

And we’re still at a stage now 10 years on where the supply growth rate is still relatively high and that it’s around 4%, but that doesn’t even take into account that a lot of the coins that exist are probably lost and that their owners can’t sell them. So if you take into consideration that maybe 4 or 5 million out of the 17 million Bitcoins that exist are lost permanently and will never be able to be recovered, which looks likely, then the growth rate is high and then 4%, 5%, 6%, per year, 7% maybe. And so that’s kind of high, relatively speaking. And so I think, you know, we still haven’t seen the period where Bitcoin really shows us its hard money chops. Shows us it’s hard money credentials, which is, in the first few years, even though people knew that the supply was limited, the reality was that miners were producing a lot of new coins every day.

Saifedean Ammous:

And they have to sell them because they had to find out they’re operating in the government money. They needed to buy machines and needed to pay electricity bills. And so new coins were being sold on the markets all the time. And that just you know, will make the price be more volatile and will give people, the misguided idea that these coins are easy, that there will always be new bitcoin coming along. And so in the first few years, we saw things like people giving away coins. And I think that’s just that’s a necessary part of the bootstrapping process to have the money initially is easy, that it’s easy to mine, but then it just keeps getting harder, but overtime it’s just going to get harder and harder to procure. The new supply is going to be increasingly insignificant compared to the existing stockpiles.

Saifedean Ammous:

In other words, that the daily traded volume of the currency between people who already hold existing currency is going to be far larger than the new supply of currency. In other words, the output of the miners, is going to be a rounding error, an insignificant rounding error in the total volume of Bitcoins transacted. And once we reach that point, I think at that point, Bitcoin becomes really hard money and people, the way to see it then is that people will really want to hold it as a store of value and that is just going to continue to become obvious to more and more people over time. And as more and more people do it, use it in the store of value, that just increases its the depth of its market. In other words, increasing saleability, increases the ability of the buyer and seller to find others wanting to buy or sell it when they need to exchange it.

Stephan Livera:

These are fantastic points. I 100% agree, I think you’re right about that point that, right now it’s about 4% or maybe a bit more inflation, but obviously in the next two years we’ll have another halving and then so on and so forth. And then by the time it’s 2030, to the point you were saying it is going to be very, very hard money from a stock to flow ratio. And I think that’s another fantastic point that you make in your book where you, one of the interesting things that you do is you historically situate Bitcoin, you sort of go through monetary history and say, why is it important to use the hardest money? And I really liked the point that you made about you basically were saying you need to use the hardest money least someone else come and take your value by basically producing your monetary unit really cheaply. So you could just expand on that point a little bit.

Saifedean Ammous:

Yeah, I think the way that I put it in the book, you can’t really isolate yourself from the consequences of what people are using as a hard money. In other words, this isn’t technology that can just be used in a vacuum. You know, you can choose, for instance, not to use a car. And then that just means that every day it takes you a little bit longer to get to your work. And that’s perfectly fine. You know, instead of getting to your work in 10 minutes, it takes you 30 minutes, let’s say. That doesn’t matter. So then, you know, let’s see, we both using bikes, but I move on from using the bike to using the car. You stick to your bike, you know, saves me a little bit of time. But there’s no reason why you can’t just keep going on with your life with your bike.

Saifedean Ammous:

Cause you know, you wake up 20 minutes earlier than me get home 20 minutes after me, but you’re in better shape than me. It’s a trade off many people are willing to do and you can remain, continue to do that for many decades. And many people have been doing that for decades and it’s perfectly fine. But I think money is a different kind of technology because that’s just not an option. You can’t isolate yourself from others using the more advanced technology than you. And the reason for that is that using something as money is essentially the goodness of it is in terms of how good it is a store of value cause anything can be exchanged. Especially today, we can put anything into warehouses and then exchange receipts for it or we could make anything into a physical form that it makes it easy to move it around and exchange it and not necessarily anything but a lot of things.

Saifedean Ammous:

But what determines something is good or bad as money for me is whether it’s a good store of value. And so if you use something as a store of value that is far superior to what I’m using as a store of value, that’s a problem for me. It’s not a problem that I can just ignore it. It’s not like my bike. It’s an adversarial technology in a way that your ability to store value in your good medium of exchange and value store will just mean that it continues to accumulate and gain value over time. Whereas mine will continue to lose value over time. And so then that just puts you in the position where you are able to buy and own whatever value I own because you are accumulating value. So this is, you know, this, I make this point in my book where I spend about the first four chapters talking about, different monies in their history and you see them by the end of the 19th century, the whole world was on the gold standard.

Saifedean Ammous:

And the reason for that was not that, you know somebody gold producers say, went and convinced everybody to do it. It wasn’t because some government or some gangs liked the color of gold and then everybody followed suit. It was economic reality and compelled everybody to deal with it. There was no way around it. If you used something other than gold and many people did up until the 19th century, you paid a heavy price for it. So societies that used say cheap forms of money that were easy to produce, well they were hard to produce for them according to their technological capabilities, but easier to produce for other societies. Essentially had to switch away from that. Best example is maybe the glass beads that were being used in West Africa. These were pretty hard money in West Africa because they didn’t have extensive glass making technology there, but they were pretty easy money for Europeans to make because glass making was widespread in Europe.

Saifedean Ammous:

And so once Europeans found that West Africans were using these things as money, they would go back to Europe, they would fill an entire boats with, you know, fill the Hull of a boat with many, many glass beads. And then they’d go take those beads to Africa and use them to buy things. And you know, for Africans, these things were far more precious than the cost of their production in Europe. And so it was a hugely beneficial trade where then the Europeans, who could make those glass beads, on the cheap, could then go to Africa and keep buying of stuff. So people in Africa then they had no choice about not using glass beads as money anymore. Once somebody has a harder than money, they are able to produce your money at a lower cost than you are able to produce it. Or they are able to produce money at a lower cost than the value that you put into your money another way of thinking of it.

Saifedean Ammous:

Then it’s just a license for them to take your value away from you. And the sooner you realize this and switch away from using your bad store of value, the better off you’ll be. And if you don’t realize it soon enough in the long run, it’s really you know, it’ll really hurt you. And the situation in West Africa was that eventually these things became known as the slave beads because Europeans were able to continue to buy everything with them to the point that that many Africans were left with nothing. And then they started buying slaves from Africans in exchange for those beads. Also, you know, if you look at silver and how silver was the demonetized in the 19th century and it lost its monetary role, you know, it was compelling economic reality that was enforced on the countries were using silver.

Saifedean Ammous:

They just saw the fact that countries using gold where appreciate were doing better, the global market for gold was getting deeper and more liquid and the the ability of gold stores, the value was arising with time. And so as a result, more and more people started dumping silver and then the price of silver starts to collapse. And so any country that was on silver, you know, they had to adjust to economic reality and most of the gold standards and those that didn’t like China and India, they waited a long time until they did that. They paid a very heavy price for that.

Stephan Livera:

Yeah. No, these are fantastic points. And I think there’s some interesting parallels that we’re seeing today now because, our money is not as, the fiat money that we use is not so scarce. People are now being chased into in a sense they’re being chased into speculating in property and in stocks and in bonds and they don’t have a sort of easy way to store their value. So I think that’s an interesting question then before in the future, let’s say if this thesis plays out, what might the norm be? Would people save directly into Bitcoin and then receive a small, you know, quote and quote deflate beneficial deflationary benefit?

Saifedean Ammous:

Yeah. I mean the problem and the way that I see it today is that people simply don’t have good money available. It doesn’t matter where you are in the world. It’s as this money has been criminalized, that’s been made illegal. It’s not possible for people to have money. And well, you know, the common objection you’ll hear from people is that, well, who needs a stable store of value when you can just put your money in the stock market and make a positive return. And at least, when you put your money in this stock market, you are driving the economic cycle forward. Whereas if you keep your in if you just hold the money, if you stay valuing money, you’re just being anti social bust by keeping that money under your mattress figuratively therefore preventing it from circulating in the economy in generating jobs. And that’s of course Keynesian nonsensitive. It’s embarrassing for sitting people what to say. Because number one economic activity isn’t generated through spending economic activities to make it through production. And so putting money under the mattress or a saving it or investing it isn’t going to magic economic resources isn’t going to create more favor, is going to make people want to work more or less. It’s not about the level of spending contrary to Keynesian perspective.

Saifedean Ammous:

But more importantly, I think what people don’t get is that the value of money is that if you have it as a reliable store of value, you know, this is a different thing from investment. That’s what people don’t understand. There’s nothing wrong with investment, but it’s a different thing from money. Money is meant to be the thing that offers high liquidity. In other words, high saleability is a better way of putting it that you are always able to send it when you want it. That will maintain its value over time. So that’s something that everybody needs to have some bit of because you never know when you break a leg, you never know when you get into an accident, you get to have an emergency and you need to do something about it. This is, requires you to have some money and everybody needs to have something like that.

Saifedean Ammous:

Investment is what’d you do after you’ve secured the little bit of money that you know you can use as your basic needs, the foundation is the money. Then once you’ve moved beyond that, then you start investing. And so if people have the ability to hold a certain amount in money, that is hard, that is hard to confiscate and hard to inflate. Then beyond that, they will put the rest of their money into investments, but they’ll be able to take good risks with that investment because they have the solid rock basis of a hard money that maintains its value over time. In other words, money offers you know, return, but you know, it has the least risk and it has no return. But it’s liquid. It’s highly liquid investments, little liquidity or they’re supposed to have low liquidity because, you know, you’re supposed to be tying up your capital and with somebody who’s using it productively. And that’s, that’s the point that gains in is miss, you know if it’s, you know for investment to be real, it’s not just the money needs to be tied up. The money needs to go somewhere and the person needs to be able to use it. And so it can’t be very nature. And the fact that we have very liquid, the markets we’re getting in and out of it doesn’t really change.

Saifedean Ammous:

That’s more about just the fuzzy nature of the money that we have. It can be withdrawn easily out of investments. But if you look at, you know, early stage investment, the reason it’s illiquid is that the company needs to have the money and it needs to have the commitment for the money. It can’t continue to operate with typical investors coming in and out from a business. That’s a feature, not a bug. And that’s why, you know, the IPO or the ICO model is another reason it’s completely broken early stage. You know, there’s a reason that companies don’t IPO at the early stage because they needed the predictability of having the money and they needed this independently. All the market’s valuation of their companies. So, you know, they need to just know that we have X amount of dollars for the next few years and to work accordingly and not have to check the stock price every morning. Once the company has matured to a point where, you know, it has reliable expenses and revenues, then it can IPO and it can go onto the markets where it offers that liquidity.

Stephan Livera:

Yeah. And another great point actually that sort of brings up, it’s almost like these companies that had done an ICO, now they’re sitting on, big chunks of Ethereum and now they’ve basically got to try and time the market on when do they kind of sell out some of that Ethereum or try and buy things with that Ethereum and now they’re having to kind of do investment management on that Ethereum rather than just go to business in actually creating a valuable product.

Saifedean Ammous:

I mean, of course, if they had a valuable product, they wouldn’t have been ICO’ing in the first place. Nobody who has an actual product has been doing an ICO, it’s just a big recycling. All Ethereum from one ICO to another, you know, starting from Ethereum itself all the way down to all these different layers of ICO’s that have been built upon it. As we say, stupid games, stupid prizes. So I think to go back to the original point, if people have the ability to form a money that is reliable, that they could store their value in, then you know, this would be the financial basis that give everybody financial security and then, just with the rest of their money. The current situation is that people don’t have that. And so they’re having to take risk with everything with all of their money.

Saifedean Ammous:

You either put it in real estate or you put it in stocks or you put it in venture capital or whatever, but everything is out there and everything offers a return. So everything has a risk. And so the dangerous thing is that of course, you know, you could end up making and losing everything and you know, you don’t even have to make the mistake yourself. You could just be driven towards the mistake because of the noise. All that caused by the manipulation of the money supply. But the absence of a store of value is why people end up having to speculate and why the fear assistance is just one big speculative bubble after another. You look across the major economies of the world. Housing is just always continuously appreciating and getting much, much more expensive because everybody’s using their house as their safety net, financial safety, rather than as a home.

Saifedean Ammous:

And that’s not healthy. And yeah, it’s a rational decision for people to do it in this current situation because if you look at it, you know, what do you do? Do you hold cash as your money or do you hold, do you hold stocks? Well, stocks are very volatile. At least the home, you know, it’s even because even though it is volatile, at least it has the security of it being there always. So you can always live in it. And so that, you know, whatever happens to this, always have a home. So it is rational within the current incentives of the current system to do something like that. But the end result, the result of everybody following that path is that houses just become insanely expensive because people are using their houses as their savings accounts.

Saifedean Ammous:

And so demand for charter. And I think if we had a sound money, if we had a hard form of money, people would buy houses only when they needed them. Only when you’re able to afford it and only when you know that you want this house because you want to live in it in the long run. And that kind of world, there’d be far less demand for buying houses and houses would be I think less expensive and we’d have a far smaller bubble or maybe no bubble. You know, people now over invest in building many, many houses because at the margin people are buying more houses than they need, not because they want the house, but because they want to use it as a store of value. So much of society’s resources towards constructions or there was construction and the house. And as we saw that 10 years ago, you know, blew up in a giant bubble across the world.

Stephan Livera:

Yeah, that’s right. And I think it’s, it’s almost a parallel to the point you were making around the glass technology where, you know, if the prices for that go up enough, well then now enough new supply, we’ll try and hit the market. And then what happens to your store? What people were incorrectly using as their store of value? Well, the price tanks,

Saifedean Ammous:

Exactly. The point is that it’s easy to make. Oh, you know, I mean, houses are relatively hard to make, you can’t print houses, although actually 3D printers might have.

Saifedean Ammous:

They’re relatively hard to make and that they theoretically expensive. But they’re not that hard to me. So it can just continue to make more and more houses and that’s what ends up happening. If people end up using anything as a store of value, the producers of it will find a way to make more and more of it. And so that will bring the price down. So effectively, you know, you can think about the process of monetization is just the market finding the strongest bubble and the hardest bubble to pop. And so people invest their money in cars and houses and buying oil and government bonds and buying commodities in stocks, all of these things that are, yeah, all of these things are bubbles that people will put money into as a store of value. But all of these are lousy as a store of value because of the simple fact that we store value in them. You make it attractive for others to make more of them. And so, you know, the way that gold became money was through hundreds of years of people storing value in many, many different things. And then all of these things getting inflated, but only gold being inflated the least, or gold surviving is the one that got its supply increase the least.

Saifedean Ammous:

And so therefore over time it just was the strongest bubble or the hardest bubble to pop because it’s hard for people to make more and more of it. And I think we’re seeing, we’re seeing something like that now. People putting their money into anything else will, you know, they’ll experience something generally pretty much everything is getting a 5% plus or minus return per year through either, you’ll speculate on it now and then it ends up that a lot of people buy in it this year and so you’re making good return, but then next year people will make more of it and that will bring the price down. So roughly speaking, anything that’s going to want to be monetized, anything that people are using as a store of value is offering a plus minus 5% per year, something like that.

Saifedean Ammous:

Except Bitcoin. Bitcoin, because of it’s hardness has been doing around 500% per year on average over the last eight years. And it’ll likely continue to do something like that more. I mean, who knows? We don’t know what’s going to happen, but it likely outperform everything else in the long run. Just because it’s very hard to make. In other words, when people expect, people don’t even need to be intelligent enough to recognize these issues or to even think about them. But through trial and error, the people who end up putting money in Bitcoin will end up doing better. And so the value of the Bitcoin will rise. That will give Bitcoiners more wealth compared to others. And that will encourage others to start putting more money into Bitcoin. And so over time, more and more wealth and value go into Bitcoin, even with all the bubbles and the price crashes and rise and drop in the price, we’re still to see this process, I think continue to repeat because you know, the economic reality is that no matter how high it goes or crashes people just can’t make more of it, whereas they can make more of everything else.

Stephan Livera:

Yeah. And I think, yeah, that’s a great another point that you raised, which we mentioned earlier, which is around the, around Bitcoin’s block difficulty adjustment. So just for anybody who’s new to that, basically the point with that is that Bitcoin is on a very strict release or supply schedule. And because of that schedule, no matter how many new miners and hash power hits the network, it’s still only going to make that set amount of Bitcoin. So as you point out, that actually makes it much harder than basically anything else. So I think that’s a good kind of point which leads into this concept that it’s not quite an, it’s not an accident that, you know, Bitcoin’s superiority. It’s not like in some ways there’s some elements of fluke or chance about it, but in some ways it’s not. But I think another kind of point actually that brings to mind is what you’ve mentioned earlier, which is around the immaculate conception of Bitcoin. You know, it’s difficulty to change. So if you could just elaborate a little bit or on around why, why is Bitcoin better? And what is the deal about the immaculate conception? Quote unquote.

Saifedean Ammous:

For me, the only reason Bitcoin has value is, and people who have

[inaudible]

it over the last few years, I think we’re just continuing to be more and more vindicated by this. The only reason Bitcoin has value is that it is hard to change is because it has a hard monetary policy that nobody can change. If Bitcoin’s value proposition was just for quick payments, then, I think that it would have collapsed and failed by now. Cause if you look at it, you know, the amount of between the the, I mean the transaction fees on Bitcoin in this capacity for Bitcoin transaction hasn’t been shown to be limited. The scale of the problems surrounding Bitcoin so far. And you know, there’s always going to just be a limit on how much we have as transactions in this kind of – simply because you know, the way Bitcoin works you need 10 minutes for each block and without one confirmation, at least you should not accept the payment because it can be, it’s going to be fraudulent. And so that whole system for mass payments, that’s not the way to replace a MasterCard or Visa. So the people buying it are not buying it to replace visa, they’re buying it for something else. And my view is that it is being bought because it’s store of value and it’s a store of value only because we know this is the supply and we know that the supply can’t be increased. And so from all the others is that it’s the one coin that can even come close to making this claim that the increased, because every other coin out there, it’s largely trivial for the people behind it to change the code and change supply.

Saifedean Ammous:

So we saw, the second biggest coin in terms of the market value and in terms of the number of people who are using it is probably Ethereum. And we saw that when things in that coin, the people who run it and the centralized party that is in control of this currency, it was almost trivial for them to hard fork the currency and force a change in the transaction log and then repeat things in a way that was favorable for them. The long story of the DAO, if anybody is interested, a pre history, although it was only what, two years ago I think or wasn’t even one year ago or two years.

Stephan Livera:

Yeah, I think it was two, I can’t remember the specific date. I think maybe one and a half I’ll look it up.

Saifedean Ammous:

Yeah, yeah. But I mean it was trivial for them to change things. So they still the Ethereum people still don’t know what their monetary policy is. They need to hard fork to implement the new form of monetary policy. At some point they might switch to what they call proof of stake, which is a complete, so I hope they go along with it because it would suit them perfectly. Plus you know, most likely what is going to end up happening, different versions.

Saifedean Ammous:

So the more we get of these different forks that copy bitcoin, the more we just see the real value proposition of Bitcoin. It’s the difference in a lot of these forks because it’s because it’s is the only one with nobody controlling it. As soon as one of these forks gets forked, the people who made the fork, whether they like it or not, they control this thing. And made something that they control and they have made something that they can change as well. And so they can change the monetary policy behind it as well. And that means that this isn’t hard money because it’s money whose hardness is determined only by somebody deciding that it should be hard. Whereas Bitcoin, it doesn’t need anybody to this and it’s operating. It is. And whether you like it or not means nothing.

Stephan Livera:

Yeah. No, that’s a good point.

Saifedean Ammous:

Yeah. It’ll continue to be hard, whether you like it or not. Whereas all the others, they just depend on somebody promising that they’re going to keep it hard. In other words, the only way to make a new Bitcoin is through proof of work, but if you want to make more of any of the altcoins, any one of the altcoins or shitcoins or forks of bitcoin. It’s not through proof of work. It’s through proof of whatever scam artists are behind that altcoin. Or that’s really what it comes down. There’s no guarantee that, you know, the people behind the ZCash or Ethereum or any of those coins, you know, they could get together tomorrow and decide, well, we’re going to change the money supply to increase increases by 5% or 10%. It’s trivial for them to do this. None of these coins have anywhere near the kind of decentralization.

Stephan Livera:

Yeah and I think

Saifedean Ammous:

Yeah. I mean, this isn’t something that, the onus of proof is not on me to prove the honest proof is on them to illustrate credibly to the market that they cannot change it. And that’s not something that you can just install, you know, it’s not like we copy Bitcoin design and then here we have an immutable blockchain because we copied Bitcoin’s design. No, because any immutable blockchain can be made. So what makes Bitcoin immutable is not the code. What makes the use of it is the fact that the code is decentralized and distributed amongst adversarial stakeholders that have no possibility of coordinating, a move away from it. Because you know, we saw in 2017, we saw with Bitcoin’s fork crisis well it was crisis for others. Not for bitcoin. We saw it was not possible for these people to change the supply, but to change Bitcoin’s block size.

Saifedean Ammous:

Well they just ended up with another shitcoin. Bitcoin has proven its immutability. Or I should say this one has made a very credible claim for being for, being able to tell you that you can be fairly confident than the next 100 years. We’re still not going to be able to change anything. You cannot make that claim about any other altcoins. It would be trivial for any of them to change anything that we’ve seen. We’ve seen how trigger happy they are with the onus is on them to illustrate how they have a set monetary policy, but it’s not something that they are even interested in illustrating. Because you know, if these people cared about hard money, they’d be in Bitcoin. The only reason that you might start your own stupid altcoin is because you don’t understand hard money.

Saifedean Ammous:

It’s astonishing, you know, when you follow all of these people that have started their own coins, it’s universally true that not a single altcoin or I’ve ever met or come across understands Austrian economics. And by economics I obviously mean real economics, Austrian economics. It’s impossible to find a shitcoiner who’s not a Keynesian. It’s impossible. Every single shitcoiner, multicoiner, altcoiner or you know, you just scratch the economic understanding and you just get a cesspool of Keynesian garbage ideas entering in their brains. Every single one of them, there is not even one of them that even will pay lip service to Austrian ideas. You know, we’ve had a lot of fun with these multicoiner with Paul and Kyle Samani you know, when they start talking about the economics, so they talk, they want to dismiss Austrian economics. Obviously they could be ignorant of it. They don’t even know what it is. So they all resort the same in the office about the all stake. Austrian economics is too rigid and not practical in the real world. And it’s not very realistic explanation of how the idiotic Keynesian brain damage propaganda they resort to.

Saifedean Ammous:

But none of them, none of the altcoins are even making a claim towards trying to be hard money. And you know, if the people behind them valued hard money, they’d be Bitcoiners.

Stephan Livera:

That’s right. And I think one thing that I really like about your book is you, actually point out the difference in sort of different conceptions of saleability. So in the part and one of the key points around saleability that you sort of add in that came in later is around the importance of censorship resistance or govrnment, like whatever your money is being government resistant. Because if it can just be inflated, well then we’re back to the same problem that we’re in today. So I think that kind of brings up that next question of what is Bitcoin really competing against? Is it competing against banks or central banks or even something like the BIS and the IMF and some of these big multinational or kind of like big government sponsored world organizations.

Saifedean Ammous:

Yeah, I think that’s the that’s the fish that we are here to fry. The conception of Bitcoin as being against competing banks I think is very misguided. And a very interesting idea that I came across a couple of days ago for the first time from a guy called the Max Hillebrand. He was interviewing me and he made that and he made the point that in the first 10 years of Bitcoin, we’ve had relatively high inflationary rates of the supply. And that easing in Bitcoin meant that the,

Saifedean Ammous:

meant that the block rewards was subsidizing the mining of Bitcoin. And so the the users of Bitcoin got to use it without having to pay transaction fees because miners were happy to process transactions for free or very little. But you know, the world of the wasn’t the inflationary reward of the coin, not in the transaction fees. And so that created the you know, just like an Austrian business cycle theory. We know that easy money creates not investments by making people disconnect through value and through opportunity cost of actions. The high inflation Bitcoin has made block space artificially cheap. And so it led to a lot of malinvestment in the block space and led to a lot of people putting a lot of you know building business models around that cheap transaction fees to come and becoming emotionally invested in having low transaction fees and that just something that wasn’t going to be sustainable after the reward, after the bitcoin award drops in value transaction fees eventually are going to have to take over and it’s going to have to be the case over time, but transaction fees need to become more and more important.

Saifedean Ammous:

So where was I going with this? What was your question?

Stephan Livera:

No, I was basically just talking about what is Bitcoin competing against and I think, yeah, like basically you’ve answered the question, it’s just that Bitcoin is not out to stop banking. It’s actually central banking and the other monetary interventions that governments do, such as legal tender laws, the existence of a lender of last resort, implicit bailout guarantees, capital gains tax laws, so on and so forth. That act to sort of force us to use Fiat money. You know, and I guess in the Austrian parlance and someone like you know, Guido Hulsmann when he uses in his book the ethics of money production, he talks about how legal tender laws force us to sort of use the inferior money and treat it as though it was the superior money.

Saifedean Ammous:

Yeah, absolutely. So you know that that notion that was marketed by a lot of the early Bitcoiners that Bitcoin is a free instant transactions around the world is it’s funny to think of it that way, but it is malinvestment the business model that was only possible because of the inflationary monetary policy of the Bitcoin central bank in the first 10 years that people even got this notion that we can run the Bitcoin proof of work system for free. Somehow you’ll be able to utilize, put your transaction on this one megabyte block that is transmitted to the entire world and recorded over thousands of computers all around the world. You’ll be able to transmit your transaction on that one common ledger and have it recorded on all these computers for free. And that’s a broken business model that many have tried to fit on bitcoin but that can’t survive, it won’t survive.

Saifedean Ammous:

But the reality is, you know, if you think about it that the model of banking itself, I mean, banking has existed under easy money and it’ll always exist in my opinion, the core functions of banking and you can ignore the sort of emotional hysteria that many people today have around banks being evil, banks being evil. It’s not banking that is wrong. Banking is a normal activity, normal healthy economic activity, which will in particular, the two core functions of banking, which is deposit banking. I think it was always going to be something that people will demand just because people don’t want to have access to all of their money available for them at all times because that’s a massive security risk. The majority of people will prefer that their money is held somewhere safe so that they are not, you know, always under the threat of having all of their money taken away from them.

Saifedean Ammous:

You don’t want to have all of your wealth stored under your mattress. Just because if it is under your mattress, then trivially, then it’s everybody could lose all of their life savings in five minutes if they just have a gun put next to their head. So people are always going to want to have their wealth or the majority of people at least are always going to want to have their wealth stored with organized, with institutions able to provide safe storage. And then secondly, the model of the other very important functions that banking provides is matching new borrowers and lenders or matching investors with entrepreneurs. That’s a highly important and sophisticated job where you know, the bankers sit down, take your deposit and then look at your timeframe, how long you want to keep the money with them. And then they’ll find somebody who needs that money for the same period and utilize it for their business and they will take the money from you and give it to them.

Saifedean Ammous:

That’s a very legitimate function. The majority of people should not be required. You know what I mean? People specialize and it’s to try and think that we’re going to kill banking is just trying to think that we’re going to get rid of the division of labor. You know? But that’s, if you’re a doctor, you don’t want to spend your time thinking about where to invest your money. The Idea of there being businesses out there who specialize in how to invest the money. They compete for your money and you give it to them and then they offer you good returns that if they don’t, you take your money out and you try it with somebody else that allows you to focus on, being an engineer or a lawyer or whatever actual productive, well lawyer’s a bad example, but you know, doctor or engineer or whatever productive actual job that you’re doing to serve society.

Saifedean Ammous:

You know, people focus on that instead of everybody trying to be you know, Warren Buffet in their spare time, you’re not going to be Warren buffet in your spare time. You have to choose, you know, and it’s good that you don’t need to do that because people can specialize in it and then you can delegate to them. So I think the function of banking is just a normal, healthy part of the market economy that’s always going to be there. The problem we have with banking are due to the fact that banks have a monopoly that is enforced by government. And due to the fact that governments allow banks to create money. In other words, by having a central bank as a lender of last resort, you’re making banking just from being a business of deposits and lending in to a business, of money creation. And so when they can create money and they have them protected monopoly, that allows them to create money solely a matter of time before banks really have used this. So the problem really is not banking. The problem is the model of central banking that backs our banking system.

Saifedean Ammous:

Ultimately it’s around, on easy money. So what we, what I think Bitcoin is offering is just completely separate, independent financial system built on hard money. That is going to be competing with the easy money of central banks around the world. And with this, the development of financial institutions on top of Bitcoin that, and we are witnessing this and obviously it’s growing by the day, but over time it’s going to grow more and more. And the interesting thing will be to see how it grows and develops over time. My, personal perspective is that we’re still going to see banks, but I don’t think we’re going to see fractional reserve banking. I don’t think we’d see fractional reserve banking on the Bitcoin, but we will see banking and we will see Bitcoin develop into an alternative to central banks.

Saifedean Ammous:

In other words, the Bitcoin settlement network is going to be an alternative to the interbank settlement and payments network or it’s a set payment and settlement network. Whereas instead of where we have one central bank for the entire planet, which is the US federal reserve, we’d move to a world in which we, the U S federal reserve today is the only institution that can offer final settlement and final clearance. Or, or maybe you could argue a few other central banks can, but fundamentally they all are branches of the US central bank because they all use dollars, as their money. And so the federal reserves liability, but we moved from that towards a system in which we have thousands and thousands of central banks able to offer final clearance of payment across the world. In that case, it will be far more decentralized and it’ll be a free market system.

Saifedean Ammous:

It would get us, get rid of the, the federal reserve as the final central bank. And also all of these international control central banks around the world, like the IMF and the world bank can be, and Bank of International Settlements, these unelected, unaccountable bureaucrats who, with the small little decisions that they take before their lunch and in the morning, that affect the fate of millions of people living in countries and that these institutions even exist. It’s a real tragedy that the IMF exists, that the BIS exists, the world bank exists, and it’s going to be a wonderful world when we get rid of these things. Imagine a world in which all of the parasites that work in these absolutely criminal organizations, these people have to get the actual jobs, teaching math to children or driving Uber cabs around. Society would be far more productive when these people are actually being productive instead of just going out there and forcing others to utilize their crappy money at the threat of force.

Stephan Livera:

That’s right. Yeah. And I think one of the things that, you know, it’s interesting that some people are now trying to sort of, so just discord or fear to say, Oh, look with Bitcoin and a lightning network, if Bitcoin is the settlement layer, people might now start doing fractional reserve on top of it. But what kind of safeguards could Bitcoiners put in place to stop this? So, as an example, would they, make audit requirements on large Bitcoin hosted wallets and exchanges? Or would they want to see demonstration of reserves or would they, maybe if they heard rumors they would do bank runs?

Saifedean Ammous:

Yeah, yeah, exactly. And you know, with Bitcoin, I think I don’t know. I listened to the perspective and the debate on fractional reserve banking within Austrian economists for quite a while. And I’m not convinced of the fractional reserve banking could develop in Bitcoin.

Saifedean Ammous:

I think all the examples of fractional reserve banking that we’ve had have either collapsed or have had a lender of last resort. I don’t see fractional reserve banking as being stable without a lender of last resort. Yeah. I think the theoretical explanation and technical records support this intention, however you look at. You know, but then again, I’m happy to be wrong, but this is not something that I take so religiously, you know, if we end up having a three market monitoring system with hard money and some form of fractional reserve bank is developed, well then that’s fine. I think it will develop. And the reason is that we’re in a free market without a lender of last resort. The ability of the banks to create credit is obviously always restricted by the fact that they could be liable to be subjected to bankrupt.

Saifedean Ammous:

People come in and ask for their money. And so the banks can’t do fractional reserve banking much because they, once they start the inflating the credits and the money supply, people could wake up about it and then start demanding their money and get it out. Now in the physical world, this is restrained by the fact that you know, physical bank runs can be discouraged and in many ways governance can somehow force you to continue to deal with a bank as it is. Banks can be very slow in redeeming obligations to people and governments can come in and print money to save the bank. And this is really fundamentally the reason why we don’t see bank funds, is that if we were to all go to the bank today, the central bank would print enough money to, or, increase enough money supply.

Saifedean Ammous:

So because we know that we could get it, we all don’t need to do it. And so it’s, it’s just the threat. It’s the fact that they are there, that makes this stuff not happen. However, in the world of Bitcoin, the marginal cost of conducting withdrawl, very little, it’s very cheap for people to click a button and ask for their dollars for their Bitcoins out of this exchange. And so I’ll also, without a lender of last resort, the way that I see it, as soon as the bank is engaged in fractional reserve banking, as soon as the bank has increased it’s liquid assets to back it up. Then it, the way that I see it, in digital world, its own assets or its own tokens will be devalued. They will be discounted compared to the underlying assets and they will be discounted to the extent they have been fractionalized. And so the results will be that people will just want

Saifedean Ammous:

To take their money out of that financial institution. And I think the bank run would happen very quickly in sort of the financial institution would fall apart quickly. So, you know, we haven’t seen a successful example of fractional reserve banking in Bitcoin. So far I’ve asked professors I like, why he thinks that is the case. And his argument was, well, you know, because there’s no lending in Bitcoin, nobody’s borrowing in Bitcoin and then that means there’s no fractional reserve banking, which, I see the point, but I think you could still have it. You know, you could have a form of fractional reserve banking and exchange office Bitcoin payments in an asset that they produce. You know, they run a payment network backed by Bitcoin and they issue tokens that are partially backed by Bitcoin. I think we could have seen a business model like that that is similar to fractional reserve banking.

Saifedean Ammous:

But it’s not sustainable to use [inaudible]. There’s no lending, but because why would anybody take the asset that is, say 70% backed by Bitcoin and trade it the on part with Bitcoin. It’ll always just be discounted by 50% next to Bitcoin, which just makes the whole process moot, what’s the point of making this 50% Bitcoin and trades at 70% of Bitcoin’s price? Well then just continue to call it Bitcoin and then just run with an asset that is 100% backed by Bitcoin. So I don’t see it developing. I think that’s just not going to work out, but we’ll see.

Stephan Livera:

Yeah, no, that’s a great point. And I think, yeah, I agree. I think a fractional reserve Bitcoin would trade at a different price to the full reserve Bitcoin. And that’s where like, that’s basically what you’re saying. One other point I had was interesting actually, this came up from the Peter Schiff debate with Eric Voorhees and I suppose there’s been some chatter about whether you might go and debate Peter and I think one of the points that he tries to make, and I’m just curious to see how you would come back to that argument. Basically one of his main arguments was all, look gold has other things you can do with it other than the medium of exchange component. And in his view, this is what gives it that quote and quote intrinsic value. Again, even from an Austrian point of view, just that term intrinsic value doesn’t really work. But I’m just curious how would you, if you were in a debate with him, how would you come back to him?

Saifedean Ammous:

I mean, it strikes me as odd that, I think it was Pierre Rochard to mention during the Schiff debate that day about how, just how much of a Keynesian Peter Schiff begins to sound like when he starts to knock Bitcoin. And this is one of them, the idea that something has intrinsic value or nothing hasn’t been added value. Value, human consciousness only humans give these value, only understand that. So just because Bitcoin is not physical doesn’t mean it can’t have value. And you know, the best example you can tell Peter Schiff is you know, I’ll take his take his laptop. He, you know, would he not pay money for all of the nonphysical stuff that’s on his laptop. Like if I had asked if I manage to break the security, the bank and then managed to say lock all of his files for them to be deleted in a week. Like the ransomware attack, you know, people pay real money to get their data back.

Saifedean Ammous:

Well, that data’s not physical. You know, it has all of your company files it has all of your family pictures, it has all of those things that you find extremely valuable, even though they’re not physical. So just immediately something being physical doesn’t give it value and something being not physical doesn’t mean that it can’t have value. So we give value in Bitcoin is a digital way of representing value through numbers that has acquired value because people have value. And so the problem of Bitcoin, Austrians needs to really come to terms with, they need to just get over the emotional attachment. Peter Schiff needs to understand it because, his entire business model depends on the funding gold, but he needs to discover the terms of the fact that look, gold isn’t money because it’s yellow or because it’s shiny or because Mises said so.

Saifedean Ammous:

Or because Menger said so. These are not the reasons the gold is money. It’s physicality and it’s not, it’s money. It is money because it was accepted on the market. It’s sound money. The definition of what made it sound money. You can buy it and sell it at a price that they choose the day, accept between the buyer and the seller. The, value of bitcoin is determined between the buyer and the seller of Bitcoin. And it’s not decreed from above, by government or by somebody else. And that’s really what makes Bitcoin hard money as opposed to money. That’s also what makes gold money. So the value of the fact that Bitcoin just emerged, this was really the most astonishing thing for Bitcoin for me was the moment that it moves towards people beginning to pay real money for, or how should I say, real money, beginning to pay government money for it.

Saifedean Ammous:

The fact that people started exchanging resources that were valuable with real opposite deposits for this digital thing, it’s still for me the most to happen last. Laslzo’s pizza, and that’s it. You know, once, once we moved from zero, anything above zero, I think that was the, that was 90% of the world take over bathroom one. Now the rest of the world is just coming to terms with, it might take another a hundred years, but really it was last Laslzo who just set the ball rolling. That was it. You know, once it moved towards being a good, that had people were willingly trading it without somebody putting a gun to their head and forcing them to accept it and whatever the value was, it once it moved towards that, that’s it. I think it was game over. That’s just going to continue to, once it has value, it’s going to continue to appreciate them.

Saifedean Ammous:

That is going to continue to prove itself to be a better store of value. And over time, you know, it’s just going to be a matter of the rest of the world coming to terms with this and learning to accept it and deal with it. So, they just need to come to terms. I think Austrian economists need to think it’s a good that has generated saleability on the market. It is accepted on the market as it has an increasingly liquid global market. Liquidity is increasing by the day. The pool of buyers and sellers, potential buyers and sellers is increasing by the day and the suitability of this good to play a monetary role is increasing by the day. So right now, people buying it are not buying it because they’re using it as a daily medium of exchange. They are using as a store of value and they’re speculating on its suitability as a store of value to continue to increase. It’s a huge change and I think that’s, that’s like any entrepreneurial bet that has positive and negative risks. But it’s so far has been working out or people who have bought Bitcoin with a long term horizon. Anybody who’s bought this one and decided to sit on this for more than three years has been rewarded handsomely for doing so.

Stephan Livera:

Yeah, that’s right. And I think the other thing that is what might kind of distinguish, if you will, between the, what we might call the crypto Austrians, you know, such as yourself and Pierre and Bitstein and Vijay Boyapati and some of those other guys and sort of the more traditional Austrians. I think there’s a slightly more appreciation of the stages of money. So this is something I think you know, William Stanley Jevons wrote about saying, you know, things start as a collectible then store value then Medium of exchange then unit of account. And you know, I think we’re just seeing that now in real time. Yeah,

Saifedean Ammous:

Yeah, exactly. It’s that fallacy of thinking that if Bitcoin is not born in it’s a final form, then it’s never going to get to that final form. And if that’s just you would expect that kind of silliness from Keynesians who think the world is just, everything comes from government decree who can’t understand the concept of things emerging through human action who think, you know, I mean if you are a cage in the gentleman, you think government is what the size of money is. And so from that you can see how they could have the conception that, well, you know, Bitcoin can’t be money because it’s not stable. There is no central bank. There is no government to stabilize its value, but offerings on the market. And it’s not going to be a simple process. It’s going to be a market process of discovering what is going to be suitable as money and that’s, that’s really I think a better way of thinking of it.

Saifedean Ammous:

I think it was Neil Woodfine’s, always got some very interesting takes on Twitter where he said, it’s very popular thing for people to say money is a social construction and it’s just typical of the kind of brain damage that is taught in universities today, which is, you know, nothing has a reason. Everything is socially constructed. This is of course Marxist garbage economics that has been taught at universities for long. Specifically in the case of money, this is very useful because it helps people, it helps hoodwink people. It helps make people stupid and that you know, whatever. Anything can be used as money. If we all agreed that say toilet paper is going to be the monetary system, then we would all be using toilet paper as money and then that would be money. This is the kind of thing that Keynesians want to believe because this is the kind of thing that you need to believe in their idiotic monetary system, but they can’t conceive of the notion that no, it’s not just about people deciding it. If everybody decided that toilet paper would be money, everybody would – that idiotic choice that they make because you know, actions have consequences.

Saifedean Ammous:

So it’s not the process. It’s not socially because much better as Neil Woodfine puts it. It’s much better to understand that as being socially discovered. So there are things that will make good money and there are things that will make one of bad money and you’re free to socially construct with your friends any kind of monetary system you like, you’re free to decide that we’re going to use toilet paper as money and other people will be free to decide to use other things as money. And couple of hundred years later, you know, those who chose toilet paper and those who chose things that aren’t very good, will just end up poor whereas those who chose things that work well as money will end up succeeding. So this is really what Bitcoin is, what Bitcoin is doing. It’s being monetized through people beginning to recognize more and more its value proposition. And I think Austrians should start thinking of this more and more seriously. It’s, has market saleability, it’s increasing by the day. It’s liquidity is increasing. It’s ability to be bought and sold by the day is increasing. It’s supply is just getting harder than harder. And in the immortal words of Satoshi, I would tell them, It might make sense to get some, in case it catches on. I think everybody needs to keep that in mind. If it does catch on, it’s going to be a big problem.

Stephan Livera:

Well, for the, chartalists and the Keynesians yeah. It’ll be a big problem for them. Not so much for those who had the foresight and the prudence to acquire some early .

Saifedean Ammous:

Yeah. And especially the people who have the foresight andn the prudence, not to fall for the idiotic government propaganda that gets taught at universities as economics. Yeah, that’s the key point.

Stephan Livera:

Yeah. So look, I mean now that you’ve written, I mean honestly I think this Bitcoin Standard book is going to be a very, a lot of people are going to look back on this and sort of see that as this book as one of the key things that helped convince a lot of people what Bitcoin was really about. Like what was sound money? I guess my question then is what’s next for you? Do you have another book or another project in mind Saifedean?

Saifedean Ammous:

Yeah. And what’s next is I want to write an economics textbook. That’s what I really want to do.

Stephan Livera:

Okay. If this is going to be like a big Magnum Opus type one or what?

Saifedean Ammous:

I think what I’d like to do is just when people ask me for the economics books after reading my book or after taking my classes, it’s hard to recommend a one go to resource. The best thing that we have problems with today is Rothbard’s Man Economy and State, but pretty old. And it’s also huge. I mean, it’s about a thousand days. And then the second part of the book is Power and Market. It’s about another 500 pages. And you know it’s not written in today’s language. It’s a little bit outdated. Many people will, especially, you know, young people won’t be able to really enjoy reading 1,500 pages of Rothbard’s very systematic and very detailed treatment of the topic. And I think particularly for university students, I think they would be value in there being a more updated and a brief but shorter version that communicates the main ideas.

Saifedean Ammous:

I mean, obviously, you know, Rothbard is the master. I think as well as Rothbard, I’ll never be able to communicate as well as he does, but you can get a lot of the, you can get the main ideas across without needing 1,500 pages, I think or I would hope you know, haven’t started yet. But I’m hopeful that you might be able to communicate the main concepts of economics in less than that. And I’d like to write a book and 300, 400 pages that could serve as a sort of a one go to stop for somebody who wants to learn economics sound economics and the idea of the, Bitcoin book touches on a lot of those ideas, but it doesn’t doesn’t do it systematically. It doesn’t do it like a textbook. What it doesn’t do it.

Saifedean Ammous:

From the context of explaining Bitcoin, you know, so when we’re explaining Bitcoin, we need to explain the business cycle. So we’ll jump to what business cycle we jumped to, what’s money, which afterwards from that. But I’d like to just do this from scratch from the beginning with what subjectivism and what is scarcity and what is marginal analysis. And then, you know, the proper Austrian way of reasoning praxeological reasoning and deducing implications of it. And building on it. I’d like to be able to write something like that, but it didn’t see a hundred, 400 pages. And so that’s, you know, if university professors want to teach economics. They are able to use it. Use it as a sort of Keynesian garbage free 100% free of all kinds of Keynesian propaganda. It’ll be free of the 20th century basically.

Stephan Livera:

Yeah. Yeah. And I’ll be good to sort of dispel some of the kind of commonly taught notions, you know, might be good at having like a debunking or some sort of section like that as well.

Saifedean Ammous:

Yeah, I think, I mean, I’d like to, I don’t want to turn it into a book that debunks things because I am hopeful that first of all, you know, we’ve already had enough folks to debunking Keynesian economics. I think if you still need somebody to debunk and you know you’ll probably be beyond my ability to help you.

Saifedean Ammous:

The, you know, the way that I say it is that these things, I hope that the book will outlive Keynesian economics. So it would be you, you’d be planning for obsolescence if you’re if you’re writing a book to just debunking in economics, hopefully within a few years, there won’t be many people taking Keynesian economics. Seriously. I hope. And so the book would not be very useful. I think. I, I’d like to write it considering my view, be that I would love to write it without having it be fixated on if you frame, the book as, this is a debunking of Keynesian economics economics and so you’ve allowed them to win because they’ve essentially allowed them to frame the terms of which you’re going to be approaching the topic. And for me, I’d like to just ignore Keynesian economics and present sound, proper economic teaching.

Stephan Livera:

In it’s own right. Yeah, no, that’s a great idea actually.

Saifedean Ammous:

In it’s own right. And then, you know, once, once you’ve read it and understood it, you know, then the debunking of economics is, it just happens automatically in your mind, you know, that you’ll never be able to take Keynes seriously. I think that’s, that’s a better way of approaching the book.

Stephan Livera:

Yeah, no, that’s good. And I think it will also have more of a timeless quality about it as well that way. So that’s, that’s another kind of angle that you can take it. Anyway, I look, we’ve gone a little over an hour now. I suppose I’ll we’ll start wrapping up. So I suppose where can the listeners find you and find your work online?

Saifedean Ammous:

So I’m most active on Twitter as you know, where all of our, Bitcoin community is usually active @Saifedean is my handle. S-A-I-F-E-D-E-A-N my book is the Bitcoin Standard that you can find that from Amazon and many other online and the offline booksellers. And my website is saifedean.com and it has links to my latest papers. And my blog posts and all sorts of other online goodies that I that I have. Yeah, that’s about it.

Stephan Livera:

Okay. That’s great. So yeah, what I’ll do is I’ll put all the links in in our show notes page for this episode and that you can find all of my work at stephanlivera.com and I’ll put a show notes page there for this. And likewise, you can find me on Twitter at Stephan Lavera. Lastly would appreciate if you share and rate and review the podcast as well as I’m just getting started with it. Thanks very much guys. And I’ll speak to you in the next one.

Leave a Reply