When most people hear “Bitcoin,” they think of fast money, digital gold, or even a speculative asset for tech-savvy investors. But in The Bitcoin Standard, economist Saifedean Ammous offers a far more profound perspective: Bitcoin is not just a technological breakthrough—it is potentially the most important monetary innovation since the emergence of gold as money. The book is both a compelling history of money and a philosophical case for sound money in a digital age.
This blog post unpacks the main themes of the book, why it’s become so influential, and what it tells us about money, economics, and our financial future.
1. Money: A Tool for Coordinating Human Action
Ammous begins with a basic, yet often overlooked, question: What is money? He frames money as a technology—a tool for storing and exchanging value across time and space. The earliest forms of money were physical goods that satisfied the criteria of scarcity, divisibility, portability, durability, and recognizability.
Historical examples include cattle, salt, seashells, and ultimately gold, which surpassed others due to its resistance to corrosion and its universal demand. The book argues that the evolution of money is always toward the most salable good—one that can easily be sold with minimal loss of value.
2. The Rise and Fall of Sound Money
A key thesis in the book is the distinction between sound money (money whose supply is hard to increase) and unsound money (money that can be inflated at will). Historically, societies with sound money—such as those based on gold standards—tended to prosper. Sound money promotes long-term thinking, savings, low time preference (valuing the future), and economic stability.
However, governments moved away from sound money, especially during the 20th century. The gold standard was progressively dismantled, especially after World War I, culminating in the 1971 decision by President Nixon to completely sever the dollar from gold. This ushered in the era of fiat money—currencies not backed by any physical commodity and controlled entirely by central banks.
Ammous argues that this shift unleashed long-term negative consequences, including:
- Perpetual inflation
- Unsustainable government debt
- Asset bubbles
- Misallocation of capital
- Increased short-termism in politics and business
3. Bitcoin as a New Form of Sound Money
This is where Bitcoin enters the narrative.
Ammous presents Bitcoin as the first credible alternative to central banking and fiat currency in the modern age. Its defining feature is its hard cap of 21 million coins, making it more resistant to inflation than even gold. In Bitcoin, monetary policy is not governed by politicians or central banks—it is enforced by mathematics, open-source software, and a decentralized network of nodes.
Key characteristics of Bitcoin that Ammous emphasizes:
- Scarcity: Supply is fixed and predictable.
- Decentralization: No central authority can manipulate it.
- Security: Mining and cryptographic techniques protect the network.
- Portability and divisibility: Ideal for the digital age.
- Unconfiscatability: Hard to seize compared to physical assets.
For Ammous, Bitcoin represents digital sound money, potentially even superior to gold because it is more easily stored, transferred, and verified in a digital economy.
4. Time Preference and Civilization
One of the most original and thought-provoking arguments in the book is about time preference—a concept from economics that refers to how much people value the present over the future.
Ammous argues that sound money lowers time preference. When people can reliably save, they invest in the future: education, infrastructure, innovation, family, art. Unsound money—especially when inflation is high—raises time preference, leading to a culture of debt, consumption, and short-term thinking.
He attributes the flourishing of art, architecture, and scientific progress during the classical gold standard era to low time preference. In contrast, modern fiat systems encourage excessive consumption, malinvestment, and even the erosion of societal values.
5. Bitcoin’s Role Today and in the Future
Ammous is clear-eyed about Bitcoin’s role. He doesn’t believe it’s currently ready to replace fiat as a day-to-day medium of exchange, nor does he push the “buy coffee with Bitcoin” narrative. Instead, he sees it evolving in phases:
- Store of value – akin to digital gold.
- Medium of exchange – possibly through second-layer solutions (like the Lightning Network).
- Unit of account – the final and most difficult stage.
As adoption grows, and if trust in fiat continues to erode due to inflation and mismanagement, Bitcoin could become the default monetary system in the future. The author stops short of calling it inevitable, but he argues that its monetary properties make it a prime candidate.
6. Criticism of Central Banking and Keynesianism
Ammous is unapologetically critical of central banking and Keynesian economics, which he argues have created cycles of boom and bust, inflated asset markets, and empowered governments to overspend and overreach.
He critiques bailouts, stimulus packages, and the tendency to print money as solutions to economic problems, warning that they merely defer and worsen underlying issues.
For Ammous, Bitcoin offers not just an alternative currency, but an escape from an entire system of monetary manipulation.
7. A Word on Crypto “Innovation”
Interestingly, Ammous doesn’t view most altcoins and DeFi projects as legitimate innovations. He views the broader crypto ecosystem as often full of distractions, scams, and unsound monetary ideas. He argues that Bitcoin is not just another coin—it’s in a category of its own due to its monetary policy, network effect, and resistance to change.
Final Thoughts: Is Bitcoin the Future of Money?
Whether you agree with all of Ammous’s conclusions or not, The Bitcoin Standard forces readers to reconsider the role money plays in civilization. It’s not just about wealth—it’s about time, culture, values, and freedom.
By weaving together monetary history, economics, and philosophy, Ammous makes a compelling case that Bitcoin is not just a new kind of money—it’s a return to sound money in a world that has largely abandoned it.
If you’re curious about why Bitcoin matters beyond price charts and news headlines, this book is essential reading.
TL;DR:
- Money evolved toward the most scarce and salable good—gold—until fiat disrupted the pattern.
- Fiat money enables inflation and long-term economic instability.
- Bitcoin’s fixed supply makes it a digital alternative to sound money like gold.
- Bitcoin encourages low time preference, savings, and long-term thinking.
- The book is not just about Bitcoin—it’s about the past, present, and future of human civilization through the lens of money.
