The Bitcoin Standard

Ammous, an economist working in the Austrian tradition, argues that money's essential property is salability across time, which requires that its supply cannot be easily increased, and that Bitcoin is the first digital form of money with an absolutely fixed supply.

His historical section covers money from primitive forms including Rai stones and glass beads through silver and gold, arguing throughout that monetary systems fail when the supply of the money can be expanded, and that whoever can expand it captures wealth from everyone holding it. His treatment of the stock to flow ratio, meaning existing supply divided by annual new production, is the analytical device, and he argues that gold's high ratio explains why it became the monetary standard.

His account of the twentieth century treats the abandonment of the gold standard as the cause of a wide range of consequences including inflation, war financing, business cycles, government expansion and what he calls high time preference, meaning a shift toward present consumption over future orientation. He extends this to claims about art, architecture and family structure that are considerably weaker than the monetary argument.

The Bitcoin sections cover the fixed supply schedule, the difficulty adjustment, and his argument that Bitcoin functions as a store of value rather than as a medium of exchange, which puts him against the payment-focused parts of the cryptocurrency community. The economics is Austrian and heterodox, and mainstream economists dispute the treatment of deflation, of business cycles and of the gold standard's record. The cultural claims are asserted without evidence. The stock to flow framework and the argument about supply expansion are the substantive contributions.