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Cato Journal is Critiquing “The Bitcoin Standard” Book to Show What’s Right vs What’s Wrong

New Bitcoin Book Review on “The Bitcoin Standard” Shows Where Dr. Ammous Is Wrong About the Coin

Dr. Saifedean Ammous, a bitcoin economist, recently authored a book called “The Bitcoin Standard”, which is already earning praise from bitcoin enthusiasts. It was published in April 2018 and has sold many copies at a fairly fast pace. In an age where physical copies of books are no longer the most common format for reading, but it still has succeeded. Dr. Ammous discusses how Bitcoin is presently and continues to be, “the Internet’s decentralization, apolitical, free-market alternative to national central banks.”

Even with the success of sales, there’s always people that do not agree with the masses. A new review on this book will be published soon in the Cato Journal, written by Tyler Whirty. In that review, his focus is primarily on how Dr. Ammous was wrong about the future of the token, though there is a small portion of the review that highlights the correct aspects.

The book review begins by discussing the overall structure of the information, primarily zoning in on the first four chapters. These chapters offer a discussion about money and how it has evolved through the years, while the next three chapters are about the differences between sound and unsound money. The last three sections make the argument that consumers should watch Bitcoin, since it will eventually become the sound money that consumers rely on.

At this point in the review, Whirty discusses what parts of the book are accurate, admiring his ability to explain,

“Scalability, hard money, stock-to-flow ratios, and money as a medium of indirect exchange.” He also says that, “this literature should be commended for pushing the narrative forward that free-market money would […] ‘make the world a better place’ by limiting the power of the state over the individual.”

Next, Whirty starts to bring the heat to dismantle the rest of Dr. Ammous’ ideas. His first concern is how the author made it sound like money was responsible for

“everything from the fall of the Roman Empire [to] the ‘breakdown of the modern family.’” He added that “such assertions are better suited to Twitter posts than to a work purporting to convey serious lessons about monetary economics, Austrian or otherwise.”

Whirty also took issue with the way that Dr. Ammous avoided the “large part played by credit and the different forms of money based upon it, including most bank deposits.” He continued, saying “Yet his analysis of the gold standard leaves much to be desired and fails to provide readers with historically accurate facts that are relevant to the book’s supposed subject — the future of the global monetary order. For example, his assertion that the rise of Hitler and Mussolini, along with World War II, was triggered by European nations’ abandonment of the gold standard and the embrace of Keynesian economics is historically inaccurate. Likewise, he lets his imagination run wild in blaming what he calls the ‘Keynesian deluge’ for the murder of classical liberal (free-market) economists in Russia, Italy, Germany, and Austria.”

Towards the end of the review of this work, he resolved that his main issue was how disappointed he was that there was so little time spent in the discussion on Bitcoin, considering the title. He said, “It is disappointing that Ammous spends so little time discussing Bitcoin and its potential as a replacement for central-bank money […] Ammous doesn’t spend any time addressing the concerns held by many economists that Bitcoin’s limited supply — an attribute lauded by Ammous but exacerbated by the unknown amount of Bitcoin lost forever — would eventually result in undesirable deflation. Nor does he summarize and confront the more technical arguments about mining power centralization or whether the incentive system can survive once the 21 millionth Bitcoin is released and miners are only rewarded by transaction fees. These are important questions if a Bitcoin standard is ever going to supplant central banks.”

Essentially, this book does not help to improve the public’s understanding of Bitcoin, based on the in-depth review of a book that mentions it directly in the title. Much like the book, his opinion will likely have followers and naysayers, but the fact that his review will be published by the Cato Journal will bring more attention, nonetheless.

At this point, Dr. Ammous has not responded for comments.

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