Book Review: Layered Money by Nik Bhatia

The author is Nik Bhatia, who is fairly well-known in Bitcoin circles. According to his bio, he is a "financial researcher, CFA charterholder, and Adjunct Professor of Finance and Business Economics".

According to Bhatia:

The underlying thesis of this book is that BTC will stand alone on the first-layer of money in the future.

I really like how this book presents the concept of layered money and how it has evolved over the last few centuries. Gold had been considered money for thousands of years prior to additional layers being created in order to make it easier to transact. Our current system of layered money all began with the Bank of Amsterdam in the 17th Century, and the British Pound in the 18th to mid 20th century, leading to the US Dollar post World War II. Up until 1971, the base layer of money had been gold for centuries. Once the peg was removed, the base layer became US Treasuries, with banking and credit for international trade being built on top of it in what he refers to as a Dollar Pyramid. A parallel digital system is emerging, with Bitcoin as the new base layer of the digital realm. Over time these systems will consolidate into a single system.

In this book he makes the following bold claim:

The plain truth about Bitcoin is that nobody controls it. It has become the first-ever government-free, universally accessible digital currency. And for these reasons, all currencies in the purely digital realm will face price discovery in BTC terms. This means that all digital currencies, from cryptocurrencies to CBDCs, will be measured in BTC, just like the Bretton Woods agreement in 1944 mandated all currencies be measured in USD.

The reader may not agree with his thesis, but we do appear to be heading in that directions. No threats have emerged to challenge the dominance of Bitcoin in the digital realm. It seems like every day we get news about rails being built for Bitcoin.

I listened to the audio book, which was narrated by Guy Swann, who has emerged as a popular narrator for Bitcoin-related audio books. It was an easy listen, and didn't get too technical or esoteric, so I could easily multi-task while it was playing. I would recommend this book if you are looking for a superficial understanding of our current monetary system, as well as the nascent digital one.

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