Saifedean Ammous (@saifedean), the author of The Bitcoin Standard: The Decentralized Alternative to Central Banking, joins Erik for a very interesting and highly quotable interview.

He expands on a number of topics from his book but also gets into a lot that isn’t in the book. He recounts the story of money from an Austrian perspective and describes why the world never really had a complete gold standard. Saif explains how government became addicted to printing money, how Bitcoin could turn out to be a better version of gold and how it might replace central banks entirely.

Saif talks about why Silicon Valley has been and may still be mistaken about Bitcoin and blockchain, and why the analogies of the early days of the internet don’t really apply. He also talks about why the blockchain as a concept has been overhyped and why Bitcoin won’t be as instantaneous and low-fee as you might think.

He also talks about what kinds of threats Bitcoin might face, how the world will change when Bitcoin becomes the new standard, and how personal finance and capitalism might evolve in a Bitcoin world.

(Murray Rothbard is the economist that Saif references early in the episode).

Quotable lines from this episode:

“You can’t omit the fact that you took a sledgehammer to the laptop before complaining that it doesn’t work.”

“Ever since then it’s been a wild ride of governments having discovered this addiction to printing money to finance themselves to do everything.”

“It’s a choice for people to opt-out of the modern nation state with all of its hefty bill that it sends you every year in the form of inflation.”

“Gold’s emergence as a money happens on the market, not because of government decree.”

“You can’t systematize human action and behavior into mathematical equations that allow you do calculations to predict an outcome.”

“The real problem is the fascination with all the buzzwords around all these projects that hang around Bitcoin pretending to be the next big thing, which we’ve been seeing since the beginning of Bitcoin. It’s the same story always and always ends in the same sad way.”

“Everybody wants everything to do everything they’ve ever read in a sci-fi novel.”

“Everybody is not capable of reasoning just beyond an analogy.”

“People think of Bitcoin as a brand… and it’s only natural to think that if it’s Pepsi, it’s going to have its Coca-Cola — but we have the internet, and we don’t have another competitor, because it’s a protocol.”

“All of these other uses that people want to attach to blockchain, I humbly submit the thesis that none of them actually matter.”

“I don’t conduct criminal activity but if I did I would definitely make sure I would not record it on a ledger accessible to millions of people instantaneously around the world.”

“Without a lender of last resort, fractional reserve banking is not going to work.”

“Every cent of investment will have to come from a cent of saving and people think that’s a horrible thing, but that’s a great thing, it’s how any society thrives.”

“The laws of economics don’t stop functioning just because government just said they should stop functioning in that sector.”

“Capital is just a market good like any other, there’s supply and there’s demand.”

“The amount of gold today that is held in global central banks is many times larger than what was held in central banks during the time of the gold standard.”

“If governments want to kill Bitcoin I think the best strategy would be to return to the gold standard and to offer everybody free markets in banking.”

“I know it’s cool to go around on college campuses and talk about destroying capitalism and all of that stuff but really it makes no sense. It’s an insane kind of suicidal death wish.”

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Venture Stories is brought to you by Village Global and is hosted by co-founder and partner, Erik Torenberg. Shawn Xu is our researcher, Colin Campbell is our audio engineer, and the show is produced by Brett Bolkowy.