Here's something I never thought I'd say: a book about monetary history and economics actually changed my life. Yeah, I know how that sounds… But stick with me here.
When I first picked up "The Bitcoin Standard" by Saifedean Ammous, I was just another expat engineer trying to figure out how to protect my wealth. Two years of living in the Middle East had taught me that earning tax-free money was great, but something still felt… off.
This book hit me like a ton of bricks. It wasn't just about Bitcoin – it was about understanding money itself. And let me tell you, once you see it, you can't unsee it.
Before I read this book it seemed a bit silly reading a book explaining what money is – I mean we deal with money every day but after reading it I realised I really didn’t have a clue.
I thought money was just the fiat currency we are used to – dollars, pounds, euros etc but that isn't what sound money should be!
It also explains why it feels like everything is slowly becoming more unaffordable and if you can't quite put your finger on the reason why – I highly suggest you read the Bitcoin Standard.
The same author also wrote another great book called the Fiat Standard that I have also reviewed.
If you're interested in how these concepts can help you achieve financial independence, check out my detailed guide on Achieving Financial Independence with Bitcoin.
The Journey Through Monetary History (That Actually Matters)
Let's start with what blew my mind first – the history of money. Now, I know what you're thinking: "Adam, please don't bore me with ancient history." Trust me, I felt the same way. But here's why this matters for your money TODAY:
From Seashells to Shitcoins: The Evolution of Money
The book starts by breaking down how humans have used different things as money throughout history:
- Seashells (yeah, actual seashells)
- Glass beads
- Large stones
- Various metals
- Government paper promises
- Digital currencies
But here's the kicker: Not all forms of money are created equal. Some worked better than others, and there's a really good reason why.
The Properties That Matter
Saifedean explains that successful money needs specific properties:
- Scarcity (can't be easily created)
- Durability (doesn't degrade)
- Portability (easy to move around)
- Divisibility (can be split into smaller units)
- Salability across time (holds value well)
Sound boring? Well, this is exactly what I thought at first but then when it really sunk in it hit me that the fiat money we earn is actually trash due to excessive money printing and we should be seeking out sound money alternatives.
The Gold Standard Era: Why It Matters Now
One of the most eye-opening parts of the book is about the gold standard. And no, this isn't just historical trivia.
Think about this:
- Under the gold standard, prices actually went DOWN over time
- Technology and productivity improvements made things cheaper
- Your savings gained purchasing power instead of losing it
The Shift That Changed Everything
The book explains how we moved from sound money (gold) to unsound money (fiat) through a series of government decisions:
- 1914: World War I disrupts the gold standard
- 1944: Bretton Woods creates the dollar standard
- 1971: Nixon ends dollar convertibility to gold
This might seem like ancient history, but it's directly affecting your savings right now. As I wrote in my post about why governments keep printing money, this system gives governments the power to create money out of thin air – and they're using it.
The Fiat Money Problem (Or Why Your Savings Are Disappearing)
This is where Saifedean gets spicy, and honestly, after living through the last few years, I get it. The problems with our current monetary system are:
1. Inflation Is a Feature, Not a Bug
- Central banks TARGET 2% inflation
- This means your money is DESIGNED to lose value
- It's a hidden tax that most people don't understand
2. The Cantillon Effect
- New money doesn't affect everyone equally
- Those closest to the money printer benefit most
- Regular savers get screwed
3. Time Preference Distortion
- Easy money encourages short-term thinking
- Saving is punished, speculation is rewarded
- Society becomes more present-oriented
The Bitcoin Innovation (And Why It's Different)
Now we get to the meat of the book – Bitcoin. But not in the way you might think. This isn't about price predictions or getting rich quick.
I have watched so many Michael Saylor videos and have seen how MicroStrategy is buying bitcoin like crazy since then and I know this book was a bit inspiration for Saylor.
Saifedean explains Bitcoin's key innovations:
1. Digital Scarcity
- First time we've had true digital scarcity
- Only 21 million Bitcoin will ever exist
- Can't be inflated away like fiat money
2. Proof of Work
- Why Bitcoin's energy usage is actually crucial
- How it solves the double-spending problem
- Why alternatives don't provide the same security
3. Network Effects
- Why Bitcoin is special compared to other cryptos
- The importance of decentralization
- Why the first-mover advantage matters
The Good, The Bad, and The Controversial
Let's be real here – this book isn't perfect. After reading it three times (yeah, I'm that guy), here's my honest breakdown:
What The Book Nails 👍
1. The Economics Actually Make Sense
Coming from an engineering background, I appreciate how Saifedean builds his arguments from first principles. He explains:
- Why money needs to be "hard" to work properly
- How monetary inflation affects more than just prices
- Why Bitcoin's properties make it superior money
2. The Historical Evidence is Solid
- Clear examples from different civilizations
- Well-documented monetary debasement patterns
- Compelling parallels to today's situation
3. The Technical Explanations
Though I dive deeper into this in my Understanding Cryptocurrency guide, the book does a great job explaining:
- How Bitcoin actually works
- Why its technical design matters
- What makes it different from other cryptocurrencies
Where It Falls Short 👎
1. The Tone Can Be… Intense
- Sometimes feels like a angry rant
- Dismissive of opposing viewpoints
- Could alienate newcomers to the ideas
2. Some Arguments Are Stretched
- The connections between sound money and art/culture feel forced
- Some historical interpretations seem cherry-picked
- Oversimplifies complex economic debates
3. Lacks Practical Implementation Guidance
- Focuses more on theory than practice
- Doesn't address the challenges of transitioning to Bitcoin
- Limited discussion of personal financial strategies
The Parts That Changed My Thinking Completely
Living as an expat in the Middle East, I've had a front-row seat to currency issues. But this book helped me understand WHY these problems exist.
Key Realizations:
Beat the Investment Hurdle Rate Before reading the bitcoin standard I hadn’t fully appreciated what currency debasement was and how it afected our investment so much.
Fast forward, this book got me into understanding more the investment hurdle rate.
Time Preference Before reading this book, I never connected monetary policy to society's time preference. Now I see it everywhere:
- Why people prefer immediate gratification
- How easy money encourages short-term thinking
- Why saving feels harder than ever
The Value of Stability As I wrote in my post about moving from FIRE to SovFIRE, I used to focus solely on accumulating more. Now I understand:
- The importance of monetary stability
- Why preserving wealth is as crucial as growing it
- How sound money creates better incentives
Real-World Applications: What I Actually Did
Theory is great, but let's talk about actual changes I made after reading this book:
1. Rethought My Savings Strategy
- Moved away from holding large amounts of fiat
- Started denominating my wealth in Bitcoin
- Developed a more conservative approach to altcoins
2. Changed My Investment Approach
- Focused on understanding sound money principles
- Stopped chasing high-yield investments
- Started thinking in longer time frames
3. Adjusted My Career Planning
- Began focusing on skills that can't be inflated away
- Started building location-independent income streams
- Thought more about long-term value creation
Who Should (and Shouldn't) Read This Book
This Book Is For You If:
- You're worried about inflation and currency devaluation
- You want to understand why the financial system works (or doesn't work) the way it does
- You're skeptical about Bitcoin but open to learning
- You're interested in long-term wealth preservation
Maybe Skip It If:
- You're looking for get-rich-quick schemes
- You want practical trading advice
- You're not ready to challenge your existing views about money
- You're easily put off by strong opinions
The Biggest Lesson: It's Not About Bitcoin
Here's what really hit home for me: This book isn't really about Bitcoin. It's about understanding money itself. As an expat who's lived through currency fluctuations and seen friends lose savings to devaluation, this really resonated.
The Bitcoin Standard taught me that:
- Money is more important than I realized
- The current system has serious flaws
- There might be a better way forward
Moving Forward: What To Do With This Information
If you're convinced and want to learn more, I'd suggest:
- First, understand the basics of sound money (check out my post on what is sound money)
- Learn about the current monetary system (see why governments keep printing money)
- Start small with Bitcoin (follow my beginner's guide to cryptocurrency)
- Focus on education before investment
Remember: This is a journey, not a race. It took me months to really digest these concepts and years to fully appreciate their importance.
Final Thoughts
The Bitcoin Standard isn't perfect, but it's essential reading for anyone serious about understanding money in the 21st century. Yes, Saifedean can be aggressive. Yes, some of his arguments are stretched. But the core message – that money matters and our current system has problems – is something everyone should consider.
As always, I'd love to hear your thoughts. Have you read the book? What did you think? Drop a comment below or reach out to me directly.
Remember: None of this is financial advice. Always do your own research and never invest more than you can afford to lose. This is just me sharing my journey and what I've learned along the way.
