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Bitcoin’s great power is to serve as a sort of digital gold, a hard asset since the total number of bitcoin is fixed at 21 million, and it’s out of the hands of governments and banks, who, as we all know from recent events, can be very naughty.

Ammous is an economist and practically half the book is an economic history of the world, a story of money and an ambitious ride through cultures and eras that would surely have earned the admiration of Karl Marx. Ammous’s account is heavily loaded with Hayek and Mises and he seems to have an almost personal hatred of Keynes.

His writing is clear and crisp, unusually so for an academic and particularly unusual for an economist. Whether his contentions are true or not, they are extremely engaging and made me see history in a different way. The Byzantines did better than the Romans because they had stricter fiscal discipline. The belle époque was especially belle because of the rule of gold. The American representative at Bretton Woods was a communist and possibly a Soviet agent.

Almost everything you get to read about bitcoin and crypto in the press is untrue or misleading. Bitcoin is decentralised and is certainly now too robust for any single government to squash. But while it may be dispersed randomly and has no CEO or swish marbled headquarters in New York or Shanghai, it does have something like a board, even if its members are rarely (if ever) in the same room.

Bitcoin is effectively controlled by a small coterie of coders and major mining groups. You control the code and the hashrate, you control bitcoin, or any other cryptocurrency.

The “power to the people” aspect of bitcoin which makes it appeal to both the far Right and the far Left is the usual opiate. Bitcoin may cut out the government to a large extent, but sooner or later the government will be around to collect tax.

You can, however, cut out the banks to a large extent. One of the most popular bitcoin slogans is “be your own bank” — a thrilling sensation until the bank robbers turn up, either in an old-fashioned manner with balaclavas and weapons, or more subtly as malware, and your money is gone. Running a bitcoin wallet is just not that simple or safe. Even John McAfee, famous for his security software and a crypto fanatic, has had his pocket picked.
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June 7th, 2018
8:06 AM
A call for another tulip mania?

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