Book Review: The Fiat Standard by Saifedean Ammous

The audience of this book seems to be existing Bitcoiners, since much of the terminology attempts to explain the fiat system using Bitcoin terminology. For example, central banks are considered nodes on the fiat network. In this way the book is preaching to the choir. It is also clear that his prior book, 'The Bitcoin Standard' is a prerequisite to reading this one.

To summarize, 'The Fiat Standard', also known as fiat money, is a monetary system in which the value of money is not based on a fixed commodity like gold or silver, but rather on the government's ability to control the money supply and maintain its value. Under the fiat standard, currency is not backed by a physical commodity or asset, but rather by the government's promise to honor its value and maintain its purchasing power.

In a fiat system, the government can increase or decrease the money supply by printing more money or removing money from circulation, which can impact inflation, interest rates, and other economic factors. This flexibility can be useful in managing the economy, but it also carries the risk of devaluing the currency if too much money is printed, leading to inflation and potentially reducing confidence in the currency.

Most countries today use a fiat monetary system, including the United States, the Eurozone, Japan, and many others. While the fiat standard has plenty of downsides, it is currently the most commonly used monetary system in the world.

Some of these downsides includes the perverse incentives with regard to:

• Food and nutrition
• Science and technology
• Politics and war
• Banking and savings
• Capital destruction
• Climate and energy

Specifically, a fiat system creates moral hazard when it is applied to any endeavor. For example, rather than go out of business, a large bank can act irresponsibly with their depositors money because they know that the government will bail them out.

If you're already a Bitcoiner this book may strengthen your resolve. I think there are better books decrying the fiat system out there for non Bitcoiners. I still enjoyed his explanation of the fiat system in Bitcoin terms.

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