Saifedean Ammous – The Bitcoin Standard

**SPEAKER_1** (0:00)
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**Patrick O'Shaughnessy** (1:03)
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**SPEAKER_4** (1:23)
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**Patrick O'Shaughnessy** (1:58)
My guest this week is Saifedean Ammous, author of the book The Bitcoin Standard. This was one of the most interesting conversations I've had in the world of cryptocurrency, primarily because we don't talk about Bitcoin or crypto until about 25 minutes into the talk.
Instead, we focus on history, economics, sound money, low time preference and gold, all interesting topics.
Saif's thinking on cryptocurrencies other than Bitcoin, which is that they are worthless, is unique and thought provoking. His reasoning around why gold shouldn't be compared to the returns generated by assets like equities was also compelling. If you followed my Hash Power episodes, this is a new and differentiated interpretation of Bitcoin as a technology for the store of value use case specifically. Like the Hash Power documentary, this episode and other Hash Power singles are brought to you by Fidelity Investments, a company that is constantly researching and experimenting with emerging technologies like crypto assets and blockchain to improve the lives of their customers. Fidelity provides a comprehensive set of products and services to individual investors, employers and financial advisory firms. For more information, please visit fidelity.com, please enjoy our conversation.
Thank you so much for being here with me today. I think a great place to start would be for you to begin with a description of sound money. It's such an important central concept in the book. This will probably be the least technical of the various cryptocurrency conversations I've had, which is refreshing for me. I'm certainly no economist, but your take on Bitcoin and its role in sort of the modern world is fascinating. So I think sound money is the perfect place to start because it's such a pervasive concept in your writing.

**Saifedean Ammous** (3:36)
Okay, well, thank you. I agree that is a great place to start. So I borrowed the Austrian economist's definition of sound money as being money whose acceptance and value are won on the market, on the free market, by people willingly accepting it in exchange, as opposed to unsound money, which is imposed with the threat of violence or whose acceptability or value is imposed with the threat of violence. This is, I think, is the separating criteria of what separates sound from unsound money. Now, it so happens to be that if you let the market decide if people have the choice in what to decide to use as money, there are some pretty good explanations for what ends up getting chosen. So historically, the most common example of what has been always chosen as money was gold, although it's not the only thing that has ever been chosen as money.
When people have the freedom to choose the monetary instrument that they want, they will tend to choose the thing that is the hardest to make, or what is called the hard money. So the hardest money ends up being chosen as sound money, ends up being chosen as the money of the market and is therefore usually the soundest money.