Viewpoint | The most amazing passage in The Bitcoin Standard (below)

Editor's Note: This article is a selection of Yorick de Mombynes's excerpt from The Bitcoin Standard. When he was published on Twitter, he was also appreciated by the original author Saifedean Ammous. We provide translations to give you a glimpse of The Bitcoin Standard.

The most amazing passage in The Bitcoin Standard (on)

56. Contemporary artists, with arrogant, jaw-dropping values, anger and existential anxiety (to gain audience recognition), have replaced research and long-term practice, and often add some political ideals that are confusing ( Usually naive Marxism)

57. When the government currency replaced the sound currency, the art patrons who had low time preferences and exquisite tastes were replaced, followed by the government bureaucracy and rude political process.

58. Friedrich Hayek's "The Use of Knowledge in the Society" is one of the most important economic papers of all time.

59. In a free market economy system, price itself is knowledge and a signal for transmitting information.

60. Price is not only a profit tool for capitalists, it is an information system in economic production, transferring knowledge around the world, and coordinating complex production processes.

61. Any economic system that attempts to cancel prices will lead to a complete collapse of economic activity and even degradation to primitive society.

62. Ludwig von Mises reveals that the fatal flaw of socialism is that there is no free market price mechanism, and socialism cannot conduct economic accounting (this is a key factor in the allocation of capital goods).

63. In an economy with a central bank and a part of the reserve bank, a committee of economists leads the supply of loan funds, which is influenced by politicians, bankers, television commentaries, and (especially) the military.

64. Increasing banknotes and digital accounts to cover up the phenomenon of insufficient savings does not really increase social wealth, but only causes currency depreciation and price distortion.

65. Only by understanding the capital structure and how interest rate manipulation can destroy people’s desire to accumulate capital can they understand the causes of recession and the volatility of the business cycle.

66. The business cycle is a natural consequence of interest rate manipulation, which distorts the capital market and makes investors think that they can rely on the unsound currency sent to them by the bank to get more capital than is actually available.

67. The business cycle is not what Keynesianism advocates. It is a myth phenomenon caused by the decline of the “animal spirit”. The real reason (operating interest rates) has been quietly planted as early as the central bankers tried to “plan to restore the economy”. Up

68. Economic theory clearly shows that recession is the inevitable result of interest rate manipulation, just as the shortage of goods is the inevitable result of price limits.

69. The history of money proves that the more severe the manipulation of the money supply, the more serious the fluctuations and recessions of the business cycle.

70. The capitalist system cannot exist without the free capital market. In the free capital market, the capital price is determined by supply and demand, and the decision of the capitalists depends on the accurate price signal.

71. The central bank’s intervention in the capital market is the root cause of all recessions and crises, and most politicians, journalists, scholars and left-wing activists blame it on capitalism.

72. Fantasy central bank can “avoid”, “beat” or “manage” recession, just as ridiculous as arson management of fire brigade

73. The centralized credit market must fail because it destroys the market's price discovery mechanism, which enables market participants to obtain (accurate signal) feedback and incentives to control production and consumption (quantity).

74. This is a typical Friedmanian liberal. They blame the government for economic problems, and then they confuse and need more government intervention to solve the problem.

75. Only when the central bank manipulates the money supply and interest rates will it lead to a large-scale bankruptcy in the entire economic field, and a large number of layoffs in all industries.

76. In a free market for money, individuals can choose the currency they are willing to use. The result is that they choose the currency with the lowest stock-increment ratio because the currency has the least fluctuations in supply and demand changes.

77. It is shocking that entrepreneurs in 1900 can use any international currency for calculations when conducting global economic planning, regardless of their exchange rate fluctuations.

78. The combination of floating exchange rate and Keynesian ideas has brought the world's unique phenomenon of currency war to the world.

79. (Use) Hard money can solve the problem of currency manipulation caused by the government and its vassal economics drummers, forcing everyone to become rich by increasing social productivity rather than relying on stupid currency manipulation.

80. Under a sound monetary system, the government needs to be financially responsible. This mode of operation is unimaginable for generations that grew up in the cyclical fluctuations of the economy in the twentieth century (narrative).

81. Today, we grew up under the propaganda of the omnipotent government of the twentieth century. It is hard to believe that we can replace the authority of the government with personal freedom and responsibility.

82. The most fundamental scam in our time is the recognition that the government needs to manage the money supply, but this is the initial assumption that all mainstream economics and political parties are not critical.

83. Whether in substance or in nominal terms, the ability to print money will greatly enhance the power of the government, and the government’s desire for power will make it useless.

84. Nakamoto has clearly not adopted the idea of ​​a standard macroeconomics textbook, but is more deeply influenced by the Austrian school (the number of currencies is not the most critical), thus adding a hard cap to the supply of Bitcoin.

85. A society with stable monetary value will usually develop into a low-time preference society, people will learn to save and plan for the future; and those with high inflation and currency depreciation will develop into a high-time preference society, and people will only pay attention to the present. And forget to save

86. If a sound currency is used, the government’s (fundraising) efforts for war will be limited to the recovery of taxes. With non-sound currency, the government can easily misappropriate wealth by constantly printing money. The amount of misappropriation depends on the upper limit of currency collapse.

87. Unhealthy currencies are a particularly dangerous tool in the hands of modern democratic governments facing re-election pressure. Modern voters do not like candidates who offer economic proposals that are more economical.

88. The temptation of unsound money is that it makes most voters and those who have unfortunately studied macroeconomics university courses convinced that there is no opportunity cost for government action.

89. When we look back at the historical tyrants, we will find that they are all manipulating a government-issued monetary system that continues to inflate and fund government operations.

90. Unsound currency makes the government power unrestricted, and each individual suffers from it. He has to be politically centered in life and put a lot of social energy and resources into the zero-sum game of fighting for power.

91. In the rules of the game of legal currency, it is more important to obtain the central bank’s currency lending than to serve customers. Companies that can get low-interest loans will have a lasting competitive advantage

92. The banking industry has become an industry that brings risk-free returns to bankers and brings no risk to the public.

93. In a world where central banks allocate credit, large companies are more likely to secure safe, low-interest loans, making them more competitive than smaller companies.

94. Bitcoin is the first engineering solution that does not require a trusted third party intermediary for digital payments, and is the first digital cash to verify scarcity.

95. Modern central banks create new currencies for lending and government spending, and newly created bitcoins are used to reward miners who consume resources for bookkeeping.

96. Difficulty adjustment is the most reliable technology to make money a “hard money” and can limit the increase in stock increment ratio, which makes Bitcoin very different from other currencies.

97. Bitcoin is by far the most expensive (hardest money): no matter how the price increases, it is impossible to affect the money supply; the increase in the price of the currency can only make the network more secure.

98. The security of Bitcoin is based on the asymmetry of "wind-up-validation": it is very difficult to create a proof of workload in order to write a transaction into a ledger, but it is very simple to verify that the workload is valid.

99. The Bitcoin transaction book may be the only objective record of the existence of the facts in the world.

100. Bitcoin is the first digital item that is no longer a sender after distribution.

101. Bitcoin, as a monetary solution to solve the problem of indirect transactions, has made a major technological leap. This leap may be as important as the development of money from cattle and salt to gold and silver.

102. If there is no conservative money supply strategy and difficulty adjustment, Bitcoin can only be a theoretically successful digital cash, and it is not likely to be widely used (because it is not safe enough)

103. The volatility of bitcoin prices stems from its solidified supply and inaction to changes in demand, as the growth rate of money has been pre-set.

104. As the size of the market grows, financial organizations will use bitcoin in more complex and in-depth scenarios, at which point the volatility of bitcoin will decline.

105. As long as the number of Bitcoins continues to increase, its price will rise as fast as the stock of the startup. Once Bitcoin’s growth stagnates, it will no longer attract high-risk investments and become ordinary monetary assets.

106. Bitcoin is the cheapest way to invest in the future, because it is the only currency that guarantees no depreciation, how to add value and say

107. Bitcoin with strict scarcity has the advantage of physical currency, but it has no shortcomings that mobile transportation is not easy. Bitcoin is probably the best value storage technology to date

108. Anyone who owns Bitcoin has a certain degree of economic freedom compared to before it was invented.

109. Since the advent of modern countries, individuals have had reliable technology for the first time and can get rid of the influence of the local government’s financial policies.

110. In general, both bitcoin and cryptography are defensive techniques designed to make property and information protection costs lower than attack costs.

111. If Bitcoin continues to grow and occupies a larger share of world wealth, it may make the country more and more like a voluntary organization that can only tax people who are willing to accept its services.

112. People often think that anarchists are a group of cloaks wearing hoodies, but bitcoin's anarchism is completely different. They are completely gentle and only provide individuals with the necessary tools to avoid government control and inflation.

113. The invention of Bitcoin has fundamentally created an independent international settlement mechanism that does not rely on any intermediary and can operate completely independent of the existing financial infrastructure.

114. Bitcoin can be seen as a reserve currency for emerging online transactions. Online banking-like institutions can issue bitcoin as a reserve for the reserve, and then keep the bitcoin in a cold wallet.

115. The advantage of Bitcoin is that the introduction of cash settlement into the digital world has created the fastest settlement method to support cross-border, long-distance large-value payments.

116. Bitcoin is best viewed as a competing product between the central bank and the settlements of large financial institutions. Bitcoin is more popular than it because it has verifiable ledger records, cryptographic security, and no third-party security holes. influences

117. Since Bitcoin has no rival risk and does not rely on third parties, it is particularly suitable for playing the same role as gold in the gold standard era.

118. If the value of Bitcoin continues to grow and is used by more financial institutions, it will become the reserve currency of the new central bank.

119. The first central bank to buy Bitcoin will prompt other banks to come and cause a significant increase in the value of Bitcoin.

120. Although central banks are mostly dismissive of the importance of Bitcoin, this situation will not last long. Central banks may have difficulty believing that Bitcoin will be a direct competitor to their business.

121. The modern central bank’s business model is collapsing and has to rely on enacting laws to maintain its competitive advantage. But they are facing opponents in the digital world, not subject to the laws of the physical world.

122. If the modern world is likened to ancient Rome, the dollar is likened to aureus, then it is suffering from the economic crisis caused by the currency collapse. At this time, Nakamoto is our Constantine, and Bitcoin is his Surade. Solidus, the Internet is our Constantinople

123. If the value of Bitcoin can maintain a certain degree of stability, it will be better than using national currency for global payment settlement, because as we see today, the value of the national currency is affected by the conditions of their respective countries and governments. fluctuation

124. Bitcoin is the only truly decentralized digital currency that spontaneously develops a delicate balance between miners, developers and users, and no one can control it.

125. After years of observing other digital currencies, there is currently no one that can achieve the balance between attack and defense between Bitcoin stakeholders and other vandals (intended to control payments) like Bitcoin.

126. We should stop pursuing who Nakamoto is, and admit that Nakamoto is not related to how to apply Bitcoin, just as we don’t care who invented the wheel.

127. At present, no digital currency has the ability to adapt to bitcoin, which stems from its true decentralization and its strong incentives for everyone who abides by the agreement.

128. The truth is different from the hype surrounding Bitcoin. It is not indisputable to eliminate trusted third parties in all areas of business and life.

129. A blockchain system with bitcoin removed is a distorted combination of the disadvantages of both (blockchain and non-blockchain): cumbersome blockchain structure, high cost and security required to maintain trusted third parties risk

130. Eight years after the invention of the blockchain, in addition to the bitcoin tailored for it, the technology has not yet achieved a breakthrough commercial application.

131. Potential applications of the touted blockchain, including payments, contracts and asset registrations, can only be run when the blockchain’s decentralized currency is fully used.

132. All blockchain applications that are not based on digital currency cannot be implemented from prototypes to commercial implementations because they are uncompetitive compared to the best-of-breed (non-blockchain) applications on the market.

133. The premise of any blockchain application is that its operation is based on electronic cash, and that electronic cash (the de-intermediation feature) provides more benefits than ordinary currency and payment channels.


Original link: Author: Yorick de Mombynes translation & proofreading: Wuwei & A sword

(This article is from the EthFans of Ethereum fans, and it is strictly forbidden to reprint without the permission of the author.