Of The Fatal Inconsistencies In Saifedean Ammous' Bitcoin Standard

A Possible Fork in the Mises Institute

In a previous essay we declared the Austrian or more specifically the Misean school of economics (or specifically in our time the Mises Institute) must respond to the apparent discordance between the existence of Bitcoin and the claim of Mises that no money can arise without first being valued in the markets for its non-monetary value.

We also introduced a concept we called Szabonian deconstruction and used it to show that earlier attempts by Miseans to re-solve the discordance between Mises’ text and the existence of Bitcoin are really actually ‘wrappers’ rather than what their proponents seem to want to claim them to be as proper explanation of original intention of Mises. One such example is from Davidson:

A recent controversy has brewed over whether or not the emergence of bitcoin, as a new medium of exchange, is in accordance with Mises’s regression theorem. The main question in the debate seems to be, is bitcoin valued in direct use? The present paper contends that with respect to the regression theorem, this issue has no bearing on bitcoin’s genesis, because it is relevant only when a new medium of exchange arises out of a pure barter economy.

While Davidson means to argue that a proper understanding of Mises would show his original intention suggests Mises only meant to explain the ORIGIN of the exchange ratio of money for commodities and not for any time thereafter that another object might arise to be money. If the wording is confusing to the reader consider Mises statement here, that after his reasoning leading to this, whatever it may be and however valid it maybe be he concludes:

…it follows that an object cannot be used as money unless, at the moment when its use as money begins, it already possesses an objective exchange value based on some other use.

While Davidson means to argue her explanation is the true intention of Mises with all bias and misinterpretation removed we argue that Davidson has instead added her own interpretation or wrapper not present in Mises work.

One might think this would be a pointless never ending ‘crusade’ to try to find who’s argument would win it (and given the vast amount of relevant supporting literature recursively cited one couldn’t tell if such a conflict would ever have a hope of ‘halting’) however, the observation or suggestion from our point of view is that the school will now have forked between those that believe Mises didn’t intend what Davidson qualifies as his intention.

From our view Davidson’s construction, disguised as a deconstruction, will not convince the wisdom in the Institute, thus at best it can only fork its energy else they synthesize, in strong consensus, with the reality of Bitcoin’s existence.

In the meantime…

On Addressing Inconsistent Systems With New Axioms

Here we are reminded of Godel's discovery of the limits of a system’s ability to state its own consistency and considering this concept as a survivability tool for cultures or systems of thought or belief etc.

We want to begin to frame cultures and systems of belief of what is true and false in a context of Turing computers that might decide these things.

This is what we refer to as Szabonian deconstruction. We mean to explain historical phenomena in such a way that we are more able to see the object in a useful Turing-framework.

With that is mind, and with a quote of Mises from our previous essay, we note the curious nature of his assertion of the strength of his system:

Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts.

And we said in our previous essay that Mises doesn’t mean to add an axiom to his system here, but rather he’s trying to express the notion that, praxeology, to which his system extends from, means to extend logic and reason, therefore IF DONE PROPERLY, one could make the assertion that even nature couldn’t break the reasoning.

To understand MIses clearly, if you are not experienced with Praxeology, understand he’s simply pointing to the nature of logic and reason, not how well he put it together.

If Mises made a mistake with logic and reason he wouldn’t consider that a failure of his system.

However it's still a poetic experience to consider that a natural phenomenon, Bitcoin, forces praxeology to be updated, regardless that Mises meant to claim that such a thing can’t heppen.

On the Nature of Praxeology

The Misean school then and any school that extends praxeology, by Mises account means to extend their argument by reason alone and doesn't believe that empirical evidence or natural observations can validate or invalidate their arguments.

To some this would seem illogical, or unscientific (in a sense it is the later but we mean to explain how it is is not) since all science seems to confirm or deny its hypotheses with natural observations and experiments.

But it's simply the extension or a different way of observing which equally views the statements that proper reason can be broken by observing a phenomenon.

Our simple assertion here then is that to extend Mises and praxeology by empirical based reason is to leave the school behind and your argument unsupported by it.

On a Proper Introduction to the Work of Saifedean Ammous

And this is in fact what we will show that Saifedean Ammous has done with this narrative “The Bitcoin Standard’. He has claimed to extend an argument from Mises, whom he referenced over 50 times in this book, using empirical points which is, by the basis and standard of Mises, absolutely invalid reasoning.

Furthermore he has wrapped the history of money in a lens that is inconsistent with anthropology. In one example we will contrast his ‘story’ of Rai Stones with an anthropology paper that makes such a case about the injustice Saifedean is guilty of here.

Lastly we show that Saifedean has wrapped Szabo’s work in a nefarious attempt to convince Bitcoiners to subscribe to his system. Thankfully with our deconstruction the brilliance of Szabo’s work can begin to shine through and perhaps attract people that mean to spend proper time understanding it.

Re-visiting Our Notation for Szabonian De-construction

Here we re-vist our notation from our previous essay with an example showing what we mean to inquire into:

Saifedean{praxeology}

We want to reveal what we feel Saifedean wrapped praxeology (Mises system) with in order to make his argument so it can be shown what praxeology is, without Saifedean’s wrapper, to those that are accustomed to see praxeology through his lens.

We meant to show the following to be invalid:

saifedean{praxeology{bitcoin}}

Examples of Points that Don’t Support a Praxeological Based Argument

Saifedean claims to be of the Austrian school of thought, and references Mises often, however his entire argument is empirical based:

Seashells are another monetary medium that was widely used in many places around the world, from North America to Africa and Asia. Historical accounts show that the most salable seashells were usually the ones that were scarcer and harder to find, because these would hold value more than the ones that can be found easily

By examining the history of the tools and materials that have been employed in the role of money throughout history, we are able to discern the characteristics that make for good money and the ones that make for bad money. Only with this background in place can we then move on to understand how Bitcoin functions and what its role as a monetary medium is.

Resolving Saifedean Construction of Praxeology With The Apparent Discordance of His Construction with Praxeology With the Addition of the Axiom of Consistency

We can sympathize with the unsuspecting Saifedean student, who doesn't themselves understand or know of Mises or Praxeology, and what Mises explains as the basis and nature of it. They might have felt that every historical example is quite obviously supportive of the reason that Saifedean extends.

But it's certainly a mistake to assert and thus it's a construction to do so.

That Mises plainly states that praxeology cannot be supported or disproved with empirical evidence or facts, cannot be resolved by asserting ‘BUT the facts make everything seem so logical’.

To add such a wrapper is not only to defile it with incositency, but to trick its followers very nefariously and deceptively.

We believe that Mises would agree and we believe the Mises Institute will loudly and decisively agree when asked to judge so.

On the Saifedeanian Construction of the Austrian View of Money

As Saifedean continues down the path of implying that historical examples lay support to the arguments he extends we notice something about how he paints the concepts of what is hard money and easy money, or good money and bad money etc:

Other ancient forms of money include cattle, cherished for their nutritional value, as they were one of the most prized possessions anyone could own and were also salable across space due to their mobility. Cattle continue to play a monetary role today, with many societies using them for payments, especially for dowries. Being bulky and not easily divisible, however, meant cattle were not very useful to solve the problems of divisibility across scales, and so another form of money coexisted along with cattle, and that was salt.

Up until now it seems the general Bitcoiner and Saifedeanian as well as anyone from the Austrian schools that should take contention has missed the aforementioned inconsistency in his presentation. But furthermore we present the argument that the way Saifedean explains and draws out the concept of money would leave Mises in shock and horror.

The idea that ‘cows are good money because they can walk’ and that they were not easily divisible thus meant other money existed etc. is absolutely an unfounded argument in the realm of praxeology.

Whether the general reader or Saifedeanians or Saifeadean agree or not the real relevant just is the school he claims to represent.

In fact his entire book is a historical account to support the nature of money he describes in order that he might finally conclude that Bitcoin has all of the ultimate features of the ideal money.

We assert in regard to our claim about Mises regression theorem that Mises would argue everything Saifedean argues makes good a good money is in fact what makes it impossible to become and thus be a money.

Then from here on out we assume that Saifedean will assert the axiom that ‘this system doesn’t rely on praxeology’. And so we will use praxeology also to help defeat it.

A Specific Example of Saifedean Making a Mistake Mises Warned Against

In his book Saifedean invokes a historic example:

The Yap Island chiefs who refused O'Keefe's cheap Rai stones understood what most modern economists fail to grasp: a money that is easy to produce is no money at all, and easy money does not make a society richer; on the contrary, it makes it poorer by placing all its hard-earned wealth for sale in exchange for something easy to produce.

Consider this anthropologist Jo Walton’s abstract and complaint from this essay entitled, “Bitcoin and stone money: Anglophone use of Yapese economic cultures, 1910-2020”:

Recently parallels have been drawn between Bitcoin and Yapese stone money. This article focuses on Fitzpatrick and McKeon’s (2019) exploration of similarities and differences. The analogy between Bitcoin and Yapese stone money is based on proposed commonalities that are inaccurate, ill-defined, and/or trivial. However, this does not signal a need to refine the comparison, but rather a need to reconsider the rationale for attempting it in the first place. Recent attempts to redefine Yapese stone money using terminology from the field of cryptocurrency reproduces a longer textual history in which writers from the Global North have misrepresented Yap for pedagogic or polemic convenience. Examples include works by William Furness III, John Maynard Keynes, Milton Friedman, and influential macroeconomics textbooks, such as N. Gregory Mankiw’s Macroeconomics. This history features frequent colonialist tropes of Yap as well as the erasure of histories of colonial violence and power. More caution should be exercised in the study and pedagogic use of Yapese economic cultures, and greater effort should be made to center Yapese voices, acknowledge colonial contexts, and reflect positionality and uncertainty.

Walton means to deconstruct:

pastAuthorsMostAustianAndNonAustrianEconomicSchools{raiStoneHistory}

We assert that Waltons would agree that their deconstruction shows that Saifedean’s argument isn’t in accord with anthropology. Not only is his argument not supported by the economic school of thought he cites, because it functions on the axiom that his type of argument is not validly supported in their line of reasoning, and furthermore that the wrapper he puts on his historical observations make them invalid from an anthropological standpoint.

The careful and clever reader, especially of the Misean kind, would notice here we have effectively provide an example that would be satisfactory to Mises as to WHY one cannot support praxeological based arguments with empirical observations, and bonus points for understanding that (by the system of praxeology’s own rules) it doesn't matter if the anthropologist arguments are valid or not.

Note Saifedean's citation for the Rai Stones example:

1The story of O’Keefe inspired the writing of a novel named His Majesty O’Keefe by Laurence Klingman and Gerald Green in 1952, which was made into a Hollywood blockbuster by the same name starring Burt Lancaster in 1954.

Possible Saifedeanian Constructions to Save Face

Because so many “Bitcoiners” or “Bitcoin Maximalists” or others support and tout the system that Saifedean expounds on we should expect, from the natural attempt to survive, construction to arise that means to re-solve the discordance between Saifedean’s work and the school of thought it purports to extend (one such added axiom would be that Saifedean means to extend Hayek only, and not Mises whom he refers to over 50 times, however, this is equally as problematic as we will sure later in this essay).

We should find many people in this group find actionable discomfort in this deconstruction we make (only in the sense of urgency and immediacy of the final eruption of Pomeii’s last view of an eruption inspired).

In this view and in the spirit of Szabonian deconstruction it is if the Saifedeanian’s are left without a founding doctrine from which their religion extends. Their idol, their core axiom, has been smashed.

Like civilizations before they are left to either attempt to adopt a superficial intersubjective truth that effectively only serves to hold order together by denying the truth of the natural phenomenon that proved the inconsistency or to move on from their religion altogether-which is absolutely observably throughout history not our nature at all (remember we aren’t ourselves praxeologist that deny a usefulness of historical evidence).

On the Historically Observed Metal Quality of Money as Support of The Saifedean Argument of Good Money And Its Praxeological Failure

Notice Saifedean’s historical account of the soundness of money:

The denarius was the silver coin that traded at the time of the Roman Republic, containing 3.9 grams of silver, while gold became the most valuable money in the civilized areas of the world at the time and gold coins were becoming more widespread. Julius Caesar, the last dictator of the Roman Republic, created the aureus coin, which contained around 8 grams of gold and was widely accepted across Europe and the Mediterranean, increasing the scope of trade and specialization in the Old World.

Of this time he notes:

Economic stability reigned for seventy-five years

Saifedean purports to deconstruct Keynes, and attributes the devaluation of the scarce and valuable metal content of the coingage to the cause of the empire’s historical decline:

With time, the Old World no longer had prosperous lands to be conquered, the ever-increasing lavish lifestyle and growing military required some new source of financing, and the number of unproductive citizens living off the emperor's largesse and price controls increased. Nero, who ruled from 54–68 AD, had found the formula to solve this, which was highly similar to Keynes's solution to Britain's and the U.S.'s problems after World War I: devaluing the currency would at once reduce the real wages of workers, reduce the burden of the government in subsidizing staples, and provide increased money for financing other government expenditure. The aureus coin was reduced from 8 to 7.2 grams, while the denarius's silver content was reduced from 3.9 to 3.41g.

He continues and asserts the trend happens by the way of a trend of ‘inflationism’:

Under the reign of Caracalla (AD 211–217), the gold content was further reduced to 6.5 grams, and under Diocletian (AD 284–305) it was further reduced to 5.5g, before he introduced a replacement coin called the solidus, with only 4.5 grams of gold. On Diocletian's watch, the denarius only had traces of silver to cover its bronze core, and the silver would disappear quite quickly with wear and tear, ending the denarius as a silver coin. As inflationism intensified in the third and fourth centuries, with it came the misguided attempts of the emperors to hide their inflation by placing price controls on basic goods.

Saifedean always takes careful pains to makes sure that he blames a Keynesian doctrine of money devaluation which ruins the economic prosperity of the civilization the money serves:

With this fall in the value of its money, the long process of terminal decline of the empire resulted in a cycle that might appear familiar to modern readers: coin clipping reduced the aureus's real value, increasing the money supply, allowing the emperor to continue imprudent overspending, but eventually resulting in inflation and economic crises, which the misguided emperors would attempt to ameliorate via further coin clipping. Ferdinand Lips summarizes this process with a lesson to modern readers: It should be of interest to modern Keynesian economists, as well as to the present generation of investors, that although the emperors of Rome frantically tried to “manage” their economies, they only succeeded in making matters worse. Price and wage controls and legal tender laws were passed, but it was like trying to hold back the tides. Rioting, corruption, lawlessness and a mindless mania for speculation and gambling engulfed the empire like a plague.

But none of this is supportive of the praxeological viewpoint. By claiming to extend the Austrian school it is strange then to ask the question of why Saifdean spent so much time expounding on points that don’t support his argument by the Austrian school. In fact it is Mises point that it's an error to think one can do so.

Does Saifedean dare say ‘Sure these aren’t supporting points to my argument, but they don’t hurt it….’

After wasting so much time expounding on the supporting historical evidence to his argument we feel one could just listen carefully and a bit longer to hear him add, ‘Besides after all, in fact, they do lend support anyways.’.

Saifedean leaves the Mises system behind.

On the Saifdeanian Construct of the Nature and Causes of the Wealth of Nations

Saifedean seems to have forgotten he claims to be from the Austrian school making such bold assertions to suggest caution implies correlation:

Human civilization flourished in times and places where sound money was widely adopted, while unsound money all too frequently coincided with civilizational decline and societal collapse.

More likely he and his readership are engaged in careless cooperation where one can make baseless assertion such as the following as if they are proper and valid deductions of reason:

Whether in Rome, Constantinople, Florence, or Venice, history shows that a sound monetary standard is a necessary prerequisite for human flourishing, without which society stands on the precipice of barbarism and destruction.

These are rather statements that would get one kicked out of MIses school. And it would be a travesty of logic to try to resolve the discordance by denying the very division between the praxeological and non-praxeological schools of economics.

“My axioms aren’t inconsistent with yours” as a newly adopted axiom to deal with such obvious inconsistency isn’t likely to meme.

On the Benefit of Cows as Money Versus Gold as Money

As Saifedean is always on the historical look out for the things that have the qualities of money that make it good money he notes of gold (in contrast to cows that according to Saifedean have the good quality of money that they can walk):

…instead of individuals having to carry gold and silver coins for large and small transactions, respectively, they could now store their wealth in gold in banks while using paper receipts, bills, and checks to make payments of any size. The holders of paper receipts could just use them to make payment themselves; bills were discounted by banks and used for clearance and checks could be cashed from the banks that issued them.

What is strange here is he seems partial to gold, in that as it passes its role to paper that represent it, gold still remains the best monetary medium, even though struggles in that it can’t walk like cows or paper:

This solved the problem of gold's salability across scales, making gold the best monetary medium—for as long as the banks hoarding people's gold would not increase the supply of papers they issued as receipts.

Returning To Bitcoin’s Violation of Mises Regression Theorem

We return now and renew the significance of the question of whether bitcoin violates Mises regression theorem and consider what Saifedean is doing in the construction of his argument about what is good money.

Here Saifedean is drawing out all of the optimal qualities of commodities that allow them to most perfectly serve as money. But he’s doing it for the purpose of showing WHY Bitcoin is the optimal medium for money. He is trying to create a supporting argument, synthesized with the Austrian school, as to why Bitcoin is the best money.

We suggest that not only is he breaking the tenants and spirit and constituency of the school of Mises, but he effectively superficially explains away the problem of violating Mises regression theorem.

And this superficial explanation certainly doesn’t clear Bitcoin.

Every single aspect that Saifedean draws from what is good money versus what is bad money, in which he ascribes all of the good qualities to bitcoin, exactly do NOT describe a NON-monetary based usefulness.

He most perfectly cuts out anything BUT a non-monetary usefulness in an attempt to show that Bitcoin has all of the properties he finds that traditional good money mediums had.

Although Saifedeanians might count on the labor involved in understanding this point to protect them from the disapprobation of the general reader the Miseans won’t overlook this error.

Saifedean explains away the entire endeavor of Mises to fix the problem of Menger’s otherwise circular argument. Saifedean, like Mises, wants us to understand it's not an issue in the first place and he will explain why.

On the Misean Reluctance to Spend the Energy to Chastise Saifedean Perversion of Praxeology

Our Szabonian deconstruction then allows us to suggest that the convenience of having people subscribe to Saifedean’s synthetic construction of Bitcoin and the Austrian school was convenient since not only did it seem to sufficiently (although with invalid reasoning that the public doesn’t realize is invalid) defend their school against the problem of Bitcoin’s discordance with Mises regression theorem but if it was ever discovered how invalid and ridiculous it was then they could just disband from him anyways (and likewise him from them).

Such a circumstance seems easy to relate metaphorically to historical times where one awaits a besiegement of one’s walls while watching a further off smaller sister city of a shared culture suffer their own fate from the besieger prior (it’s no longer for writers of our time to provide such historical examples but rather for chatGTP allowing for brevity and timeless context of examples).

On Correlation Versus Causation of Good or Bad Money Standards and Times of War Versus Economic Prosperity

Saifedean continues to compare the history of the economic circumstances of the world with the money standard of the time:

With the majority of the world on one sound monetary unit, there was never a period that witnessed as much capital accumulation, global trade, restraint on government, and transformation of living standards worldwide. Not only were the economies of the west far freer back then, the societies themselves were far freer.

This world came crashing down in the catastrophic year 1914, which was not only the year of the outbreak of World War I, but the year that the world's major economies went off of the gold standard and replaced it with unsound government money.

A praxeologist would never allow such points to taint their argument. Here we want to state we feel it's important and useful to make such a comparison, however we agree with what we feel Mises would point out which is that it would be a mistake to simply assert that good money of the time is the cause of peace and prosperity as if an emperor or government could decree it any more than they could decree the peace and prosperity itself.

The problem of economics is the problem of natural based scarcity in the face of human choice and action.

We would like to suggest that ALL significant and reasonable economic schools would deny it possible for an emperor or government to increase the level of prosperity of an economy simply by declaring their money to be of the Saifedeanian standard he paints (different than asserting or noting these two phenomenon may be bound to each other some way).

We assert that would be to axiomize away the problem of economics that any school means to inquire into. Something Menger, Mises, and Hayek each warned against.

On Remedies of Falling Into Quicksand

As a shortcut for understanding and expressing the implication of Saifedean’s account of the history of economy versus the history of money standards we would like to offer the image of Homer Simpson reaching down into quicksand to pull his own legs out.

From experience and intuition we caution the general reader that Saifedean may try to use the synthesis of a Homer Quicksand escape construction to re-solve the discordance pointed out with the absurdity of implying an economy can declare itself into prosperity.

On Possible Other Explanations As to The Observable Relations Between the Prosperity of Economies and Their Monetary Standards as Measured By Saifedeanian Hardness

One natural and obvious view of the apparent correlation between money standards by the Saifedeanian measure and the economic harmony of the time is to consider the quality of the money as a ratio of the savings of the economy.

So that in times of strife the people of the currency use inflation to socialize their own welfare. While the libertarian sees this as a type of theft and a tax it would well explain the correlation but without any unjust power given to the sovereign to fix, or want to fix, the problem through the intention of the money standard.

In such a scenario the people would be unable to feed themselves if they couldn’t inflate their money to do so.

We will put forth an argument that might support that possibility, but it’s not necessary for such an argument to be fleshed out or valid in order for it to illuminate another of Saifedean’s abuse of claiming to extend an argument from the Austrian school.

Thus we have used Szabonian deconstruction to reveal the original nature of Mises and the Austrian school thus illuminating and invalidating Saifedean’s wrapping of it.

In the following passage Saifedean seems not to have remembered the beginning of his own rambling else his argument boils down to prosperity we seek through sound money will lead us to ruin:

This might have been feasible when the population was highly educated and knowledgeable about the dangers of unsound money, but with every passing generation displaying the intellectual complacence that tends to accompany wealth…

Nonetheless you can understand the contrasting view we paint when we want to consider whether or not inflation may be one day historically viewed as a type of cooperation that allowed civilizations to stave off many types of economic starvation:

….the siren song of con artists and court-jester economists would prove increasingly irresistible for more of the population, leaving only a minority of knowledgeable economists and historians fighting an uphill battle to convince people that wealth can't be generated by tampering with the money supply, that allowing a sovereign the control of the money can only lead to them increasing their control of everyone's life…

A deconstruction of:

Saifedean{historicalInflationObservations}

We can understand this in terms of socializing defense in times of war as well whereas Saifedean wants us to believe history is correctly and usefully wrapped in his bias:

With the simple suspension of gold redeemability, governments' war efforts were no longer limited to the money that they had in their own treasuries, but extended virtually to the entire wealth of the population. For as long as the government could print more money and have that money accepted by its citizens and foreigners, it could keep financing the war.

Here we can think of the complexity distance between the above Saifedeanian wrapper in the context of funding war and how a libertarian would wrap central banking much the same. The Saifedeanian would certainly appease the libertarian Misean and libertarian Bitcoiner while simultaneously leaving a nation unable to defend itself versus an immoral conqueror if it were to adopt the decree of the Saifedeanian money standard.

Saifedeanian Wrapping of the Bretton Woods Outcome by Wrapping Keynes

Saifdean references a broader view of the global monetary system via a citation to Hayek:

….a monetary system which Hayek named Monetary Nationalism, in a brilliant short book of the same name:

By Monetary Nationalism I mean the doctrine that a country's share in the world's supply of money should not be left to be determined by the same principles and the same mechanism as those which determine the relative amounts of money in its different regions or localities.

A truly International Monetary System would be one where the whole world possessed a homogeneous currency such as obtains within separate countries and where its flow between regions was left to be determined by the results of the action of all individuals.5

Never again would gold return to being the world's homogeneous currency, with central banks' monopoly position and restrictions on gold ownership forcing people to use national government moneys. The introduction of bitcoin, as a currency native to the Internet superseding national borders and outside the realm of governmental control, offers an intriguing possibility for the emergence

He then referencing the Bretton Woods conference outcome noting it to be so bad it makes Keynes look not so unhinged (this is because Keynes proposal was NOT chosen for new monetary order as result of the conference):

In the battle for centrally planned global monetary orders, White was to emerge victorious with a plan that even made Keynes's look not entirely unhinged.

However, he wraps the flaws in the new system as being “Keynesian”:

In the Bretton Woods system, however, governments were dominated by Keynesian economists who viewed activist fiscal and monetary policy as a natural and important part of government policy.

Why does he make this strange construction?

Because Keynesian economics is the school of thought that argues for the use and socialization of the devaluation of an economy's money in order to combat times of economic difficulty.

If Keynesianism was held or observed as a natural ‘truth’ the Saifedeanian system would be inconsistent like we suggested it could be before-noting a decline in a civilization's money standard might only be a measure of the civilization's decline not the cause of it.

Keynes' proposal for the new economy being decided at Bretton Woods was effectively the bancor, a global supranational currency unit scarcely supplied by a cooperative body of nations:

The bancor was a supranational currency that John Maynard Keynes and E. F. Schumacher[1] conceptualised in the years 1940–1942 and which the United Kingdom proposed to introduce after World War II. The name was inspired by the French banque or ('bank gold').[2] This newly created supranational currency would then be used in international trade as a unit of account within a multilateral clearing system—the International Clearing Union—which would also need to be founded.

This ascribes to the same role that Saifedean ascribes to Bitcoin. Although Saifedean won’t admit it, we will show it later in our essays.

It’s important then that Saifedeanians learn, from their messenger Saifedean, that Keyensian is the devil and his name shall only be brought up in vain. It makes sense then that he brings up Keynes lifestyle choices and points out his homosexuality and alleges a pedaphiliac nature.

As if a perfect synthetic construction of Machiavelli and Smith's Theory of Moral Sentiments.

On the Comparison of Salt and Cows as Money From a Praxeological Dissection

That cattle to Saifedean’s argument are money, and good money when considering their quality of being able to walk, it's interesting that he would also mean to suggest that salt is also a good money (in the following we left in the comments on language as both an example of an praxeological invalid invocation as well as probably similarly invalid construction about the origin of language and implication it supports his arguments):

Cattle continue to play a monetary role today, with many societies using them for payments, especially for dowries. Being bulky and not easily divisible, however, meant cattle were not very useful to solve the problems of divisibility across scales, and so another form of money coexisted along with cattle, and that was salt. Salt was easy to keep for long durations and could be easily divided and grouped into whatever weight was necessary. These historical facts are still apparent in the English language, as the word pecuniary is derived from pecus, the Latin word for cattle, while the word salary is derived from sal, the Latin word for salt.5

For Saifedean where cows fall short of being good money, for example their lack of divisibility, salt takes on the monetary role.

It’s not a stretch to the common reader to suggest salt is money, nor cows, as in different fields of study they are often referred to as such, in different ways, for different reasons, with different constructions and different usefulness for those constructions.

Here we argue Saifedean is reaching into the general reader's imagination to fill in the reasoning behind cows being money on the one hand because of their mobility and salt being money on the other hand simply because it fulfills the qualities of money that cows don’t have.

Put another way its as if Saifedean is simply listing of historically accounts of things we have called money, whether at their time, or as a construction looking back on their time, and calling things that support his argument good money, and those that don’t less than good money on a scale that helps him make his argument.

One could jokingly assume that Saifedean might argue birds were at one time good money because they can fly, but then not so good because they don’t drown as well as Rai stones.

Cherry Picking the history of money for qualities of mediums that support one's argument is a cheap parlor trick way to sell Snake Oil.

On The Nature of Cows as Money Above and Beyond Simply a Commodity of Trade

It’s for the Saifedeanian student to explain without synthetic construction, how and when cows become money and then not money again and when and where (at least then we could ask how). Saifedean says, ‘Cattle continue to play a monetary role today, with many societies using them for payments, especially for dowries.’ Does this mean they are money? That they are used to payments in dowries? All such objects used as dowries are money? Land is money?

What is it about cattle that makes them money and simply not commodities for trade?

It can’t be because people make payments with them. That's not a money only quality. To say ‘something you make a payment with is therefore money’ is a semantic fallacy of reasoning.

Are cattle money because people keep them for later as an intermediate commodity to sell on the market for goods they want after first buying it with some other goods? And what of the milk they produce and the land they need and the food they eat. Is this really an intermediate commodity, a medium of exchange, or the product of land and labor and a commodity the cattle owner brings to the market or gifts to another?

Is it because cattle can be used to buy anything on the market aka they are the most saleable good (although no doubt for much of mankind the one of largest most indivisible goods or money of the market commodities available)?

None of these things, no doubt to the surprise of Saifedeanians, are points of cattle being used as a money rather than a commodity.

On The Nature of Salt or This or That as Money Above and Beyond Simply a Commodity of Trade

We find the same empty argument in the treatment of salt of the Saifedeanian synthesis of the Austrian school and Bitcoin. Does he mean to suggest that someone came to the market with a bag of salt in order to make their purchase? That their employer paid them in salt because it was easier to pay them in salt then the commodities they together produce, or the commodities that the salt-earner would rather have than salt?

And Saifedean claims in this we have a dual purpose, that coincidentally this rescues cows from their only deficiency as money, their indivisibility, since salt is the hero of divisibility, but also we have a new example of a quality of money that Bitcoin also has:

Note that this quality is a monetary quality: divisibility.

What is the problem of declaring salt is a money for Saifedean argument?

Shouldn’t then bread, ale, wheat, eggs, food, all count as money, depending if the laborer either saves some or takes them to the market?

But they don’t have divisibility like a cow.

Saifdean would say all are of course good monies not only because they are divisible but edible as well.

Eggs too are good money because you can use them to lay and hatch more money (although we will learn in the next section no doubt Saifdean would say, of eggs as money, soon emperors would destroy their empires by over-laying and hatching them).

On Blaming Monetary Policy For The Fall of Empires

Saifedean explains of our current system, with no sympathy to the Keynesian notion of socializing economic uncertainties:

The reduction in the purchasing power of money is similar to a form of taxation or expropriation, reducing the real value of one's money even while the nominal value is constant…

And he gives his framing with a strong implication that sound policy, enacted by government, would imply prosperity, blaming civilizations whose currency inflated out of existence on their own policy based demise:

This helps explain why civilizations prosper under a sound monetary system, but disintegrate when their monetary systems are debased, as was the case with the Romans, the Byzantines, and modern European societies. The contrast between the nineteenth and twentieth centuries can be understood in the context of the move away from sound money and all the attendant problems that creates.

He goes on to make the point about it, in a way that is unmistakable, he means to teach the world how to have money that supports prosperity:

What matters in money is its purchasing power, not its quantity, and as such, any quantity of money is enough to fulfil the monetary functions, as long as it is divisible and groupable enough to satisfy holders' transaction and storage needs. Any quantity of economic transactions could be supported by a money supply of any size as long as the units are divisible enough.

We note here the use of the qualifier of divisible ‘enough’ and point out how convenient it is that there is a sufficient but undefined level of divisibility necessary.

This leads us to ask how divisible are cows in this sense?

With an entirely cherrypicked reframing of history, to support the extension of his claimed Austrian school roots, with an argument that breaks the axioms of one of its leading founders he cites over 50 times, and and argument that runs antithetical to anthropological views of historical evidence, Saifedean declares the deduction of what is the theoretical ideal money, which HAPPENS to fit Bitcoin and in his view only Bitcoin:

A theoretically ideal money would be one whose supply is fixed, meaning nobody could produce more of it.

Does Saifedean Know What He Has Done In Regard To Attempting to Extend the Austrian School With a Praxeologically Invalid Argument?

Here we ask if Saifedean is not a professor at the Austrian school then what is he a professor of? Certainly not logic.

A Truthful Deduction Implicit From An Otherwise Assumed Consistent View of Saifedean’s Construction

As a side note it could never be argued from a Saifedeanian that one the one hand, ‘A theoretically ideal money would be one whose supply is fixed, meaning nobody could produce more of it.’ and yet on the other any economic agents ever turned to a second or alternate medium of money because their first and primary one didn’t have sufficient amounts of units or divisibility.

Otherwise does he mean to argue to such agents that they preferred a secondary money but against their own better judgment of what is ideal?

Readers might not understand why we point this out; it's really not a good way to start a chess game.

Paradoxically perhaps for the Saifedeanian, they must defend against both the secondary use of a money because the primary wasn’t divisible enough but also not in total supply enough. By Saifedean’s reasoning other than the initial need for sufficient divisibility these can’t be reasons to adopt a secondary money.

It would be a curious experiment to see if the Saifedeanian school, out of survival, in the face of historical evidence, supported by anthropology, showed that agents did in fact often find a better money because their primary one wasn’t divisible or abundant enough and wonder if they would invoke the praxeological clause that you can’t disprove Austrian based economics arguments with empirical evidence.

On Saleability

Saleability is a key concept to Saifedean’s arguments. Throughout his argument he builds up a construction of Mengers Origin of money, based on Mengers idea that goods have a degree of ‘saleability’ (here he cites Mengers entire book):

From examining such human choices in market situations, Carl Menger, the father of the Austrian school of economics and founder of marginal analysis in economics, came up with an understanding of the key property that leads to a good being adopted freely as money on the market, and that is salability—the ease with which a good can be sold on the market whenever its holder desires, with the least loss in its price.

The relative salability of goods can be assessed in terms of how well they address the three facets of the problem of the lack of coincidence of wants mentioned earlier: their salability across scales, across space, and across time

A decent simile for Saleabiltiy for the general reader of today’s time is: liquidity and idealness of transport and storage properties (low cost to transport and doesn’t decay).

Saifdean points to the salability across time as equivalent to storing value:

It is the third element, salability across time, which is the most crucial. A good’s salability across time refers to its ability to hold value into the future, allowing the holder to store wealth in it, which is the second function of money: store of value

And then notes that a not to drastic rate of supply if necessary for that value:

For the good to maintain its value, it is also necessary that the supply of the good not increase too drastically during the period during which the holder owns it.

What he means to do and will continue to do in his argument is argue that each money medium of its time, was the most saleable good, and that the properties of each of these monies coincidentally all have, are actually not coincidental, and that Bitcoin happens to have all these properties is also not coincidental to his findings.

What he can’t do is claim that Bitcoin is the most saleable good because it has been valued as being so above all other goods. This would be nonsensical by Menger’s account.

Bitcoin Saifedean must argue, is the ideal money, because it has all of the same properties that the most saleable goods historically had, like divisibility, even though bitcoin itself is very not saleable (we will go into this).

Re-visiting Mises Construction of Menger

How far must we traverse Menger in order to validate or invalidate Saifedean? No distance. Menger’s concept of saleability is measurement of a commodities mony-ness but in regard to the origins of money BEFORE money and money based prices can exist.

Consider Mises Regression theorem as an earlier synthetic construct by Mises to resolve the problem of how a money inherits its saleability based commodity valuation (to consider it a construct is our addition, that he explores how money inherits its ability to serve as a medium of exchange from its commodity based saleability scoring is commonly accepted).

‘How does money get its market valuation?’ ‘From its pre-money saleability valuation.’ ‘But if it has no saleability valuation BASED on its use as a money where did it get its initial valuation?’

From its valuation as a non-monetarily useful commodity Mises proclaims!

On Saleability as the Cause of an Object Becoming Money

Saleability isn’t obtained from becoming a money, it is stated as the prerequisite to natural transition to it, and a previous market value is the crux of the concept of it.

It seems through our Szabonian deconstruction of Saifedean’s construction of Menger we have usefully deconstructed Mises and revealed a nuanced understanding of Menger and the unre-solved issue Mises meant to address with his construction.

Under the framework of Menger, which Saifedean claims to extend, how does Bitcoin get its saleability, with no non-monetary use case, but before it becomes a money?

On the Saleability of Bitcoin

Saleability relies on the ability to exchange the good in question at the ‘economic price’ of the time where an uneconomic price is defined as:

The price of a commodity may be denoted as uneconomic on two grounds: (1) in consequence of error, ignorance, caprice, and so forth; (2) in consequence of the circumstance that only a part of the supply is available to the demand, the rest for some reason or other being withheld, and the price in consequence not commensurate with the actually existing economic situation.

The general reader is no doubt confused because in this observation and scenario there is not yet money for market prices to be evaluated. This matters not however since what we want to call attention to is the saleability of Bitcoin, as an already established post Menger-Origin-of-Money world when the cost to transact Bitcoin renders every day coffee type transactions absurd as well as the observation that there is hardly market price for Bitcoin almost anywhere today and its illegal in many ways, in many counties.

To be clear, the author supports the view that Bitcoin is likely to be a boon society. But at this time it’s saleability is not ideal and optimal.

In fact by these points and Mengers definition Bitcoin isn’t very saleable at all. Consider that political implications matter:

The restrictions imposed politically and socially on their being transferred from one period of time to another.

If the argument from Saifedean is that it will eventually arise to be then we rest our case that he is not at all schooled in any Austrian economics whatsoever and has never once read Menger’s Origin of Money (he would be ironically trapped in the circularity Mises denied could ever be an issue).

On Menger’s Definition of Money

In Menger’s On the Origins of Money he outlines the framework of his inquiry into what he refers to as an enigma:

There is a phenomenon which has from of old and in a peculiar degree attracted the attention of social philosophers and practical economists, the fact of certain commodities (these being in advanced civilizations coined pieces of gold and silver, together subsequently with documents representing those coins) becoming universally acceptable media of exchange.

…

…that every economic unit in a nation should be ready to exchange his goods for little metal disks apparently useless as such, or for documents representing the latter, is a procedure so opposed to the ordinary course of things…

…

It must not be supposed that the form of coin, or document, employed as current-money, constitutes the enigma in this phenomenon. We may look away from these forms and go back to earlier stages of economic development, or indeed to what still obtains in countries here and there, where we find the precious metals in a uncoined state serving as the medium of exchange, and even certain other commodities, cattle, skins, cubes of tea, slabs of salt, cowrie-shells, etc.; still we are confronted by this phenomenon, still we have to explain why it is that the economic man is ready to accept a certain kind of commodity, even if he does not need it, or if his need of it is already supplied, in exchange for all the goods he has brought to market, while it is none the less what he needs that he consults in the first instance, with respect to the goods he intends to acquire in the course of his transactions.

What is the nature of those little disks or documents, which in themselves seem to serve no useful purpose, and which nevertheless, in contradiction to the rest of experience, pass from one hand to another in exchange for the most useful commodities, nay, for which every one is so eagerly bent on surrendering his wares? Is money an organic member in the world of commodities, or is it an economic anomaly? Are we to refer its commercial currency and its value in trade to the same causes conditioning those of other goods, or are they the distinct product of convention and authority?

Here we can see where Saifedean inherited the implication that these things listed can be assumed to have been money (without proper qualifications as to how, why, or there context) and more specifically begin to deconstruct money from Menger’s view of it:

Menger{money}

Menger doesn't really take the time to define money other than than what is implied by the framework of his inquiry but here we see him use it synonymously with ‘medium of exchange’:

The enigmatic phenomenon of money is even at this day without an explanation that satisfies; nor is there yet agreement on the most fundamental questions of its nature and functions. Even at this day we have no satisfactory theory of money. The idea which lay first to hand for an explanation of the specific function of money as a universal current medium of exchange

… the problem that is to be solved, to wit, the explaining how it has come to pass that certain commodities (the precious metals at certain stages of culture) should be promoted amongst the mass of all other commodities, and accepted as the generally acknowledged media of exchange. It is a question concerning not only the origin but also the nature of money and its position in relation to all other commodities.

On The Szabonian Deconstruction of Money

This brings us to the second reason for the essay that we might illuminate a problem with economic philosophers of humanity. We can now put to good use our concept and syntax for Szabonian deconstruction.

What we are alluding to and discovering at this point is the problem with observing the history of an object that over time itself evolves to solve an evolving problem. This is the tightest way we feel we should point to this (if we explain it more accurately with words like money, we might have been too specific and exclusive in the definition we imply etc).

Consider that over the history of man we haven’t had until recently much evidence to go on to see the EVOLUTION of money in relation to the EVOLUTION of the changing circumstance of its corresponding time (nor time for the great thinkers to re-evaulate their works past a single lifetime).

Our suggestion here is that authors would have been more careful to first define nature AND the context of the money they wish to observe and philosophize about with their readers. Such a deconstruction might be represented like this:

historyOfMoney{money}

But of course an infinite regress of wrapping if we want to show all of the history of writers of money that read and wrote of other such writers.

On The Usefulness Of The Concept of Wrapped Money Versus Cherry Picking Empirical Observations of It

In a future paper we mean to illuminate ideas for re-viewing the entirety of the history of money. For now we mean to point to the wrapability (the easiness to wrap and memeability of the wrapping) of money over its history and how we not only seem intent with wrapping it in explanation but also that money itself can be examined for evidence of evolution layers (like rings on a tree).

We feel this method, although more complex and involving more effort, will probably yield to be more useful (ie will meme better), than simply pointing at historical examples of things we called money and looking for favorable commonalities.

On Vertical and Horizontal Distance Complexity in Regard to the Origins of Money And the Recursive and Curious Nature of Wrapping Money

That in some sense we can think of similar money scenarios or mediums as having different wrappers but parallel or horizontal functions. Or that we can think of some circumstance in which wrapping money of a time is necessary for it to serve some culture evolution and see this as a vertical difference. These are loose ideas of which we are taking the opportunity presented in this essay to briefly present before we fully expound on them in later writings.

By recursive we mean to suggest that as we traverse the vertical depth of historyOfMoney{money} we should find wrapper upon wrapper of useful evolutions of it. Of course the distinctions we call ‘wrappers’ are subjective ascribed, but we will eventually have given a strongly defined framework constructed from a synthesis with Szabo’s work in order tease the most properly useful wrappers of money out.

In Regard to the Saleability of Shells and Referencing Nick Szabo’s Shelling Out As Confirmation

Saifedean cites Szabo and makes the assertion that Seashells, being used as money around the world throughout history, are an example that scarcity and being difficult to find cause the most saleable seashells to rise to the top of the saleability gauntlet become money:

Seashells are another monetary medium that was widely used in many places around the world, from North America to Africa and Asia. Historical accounts show that the most salable seashells were usually the ones that were scarcer and harder to find, because these would hold value more than the ones that can be found easily.3

Notice Saifedean provides no historical evidence of the claim that the saleability of the shells the markets ordered caused them to value the scarcest the most.

We would like to suggest that this is an ignorant assumption by Saifedean meant to fool his readers, unsupported by archeology and anthropology, and unsupported by Nick Szabo and his essay Shelling Out.

In Szabo’s work it is possible for non-scarce items, combined with some process that provides costly unforgeability, to become what he calls ‘proto-money’. This means he doesn’t expect necessarily that the most scarce and hard to find or most saleable shells arose to become money.

It’s very important because Szabo is a very well learned polymath that would be quite embarrassed to have made the mistake that Saifedean confers on him via his citation.

It would of course be quite convenient to point out that historically the most rare and money-like commodities become money and that Bitcoin has these exact money-like qualities and that therefore Bitcoin is and will be held as the best money.

But Szabo’s essay isn’t meant to explain that rare things get value simply because they are rare. Or scarce things are valued and valued because they are scarce (however we want to define scare). In fact his essay means to explain that very paradox with the concept of the seemingly otherwise wasteful process that somehow instills value in otherwise potentially valueless objects.

He means to EXPLAIN why we might be a collectible type of society, and this doesn’t support the idea that we are able to and do naturally value scarce things-simply because they are scarce.

They are scarce…we value them…we want to understand why.

Szabo is deconstructing Menger:

Menger{money}

Saifedean is constructing a construction of Szabo:

saifedean{saifean{Szabo{Menger{money}}

Szabo is speaking to the apparent failure of the Austrian school of economics to consider how a medium or object that hasn’t had a previous market based value might be instilled with such a value. That is to say Szabo’s argument precludes the necessity of the Mises regression theorem as a re-solving synthesis to Menger’s work and emerging economic theories.

Saifedean is trying to extend Menger and skipping the regression paradox by wrapping Szabo, with the IMPLICATION that Szabo wrapped Menger.

But Szabo deconstructed Menger. Saifedean’s construction falls apart.

Szabo shows scarcity is an outcome of our culture habits and institution (the reader is invited to test the idea that money is an artifact of practical usefulness); Saifedeans argument rather relies on our want for scarcity to be the cause of our culture and habits.

He can’t cite Szabo for this with consistency. Ask Szabo.

On the Idea of Markets Participants In Historical Civilizations Ordering Shells By Saleability

Saifeans readership is no doubt fooled by the concept of a pre-money price. Imagine a market where there is no mony of the time, no unit of account. How does a trader in the fervor of a marketplace of many goods and many types of shells (for whatever reason they are valued in the market we don’t know but are curious about) decide that one shell over another will fetch the economic price of its time more so than another shell?

Economic price here means to be able to trade the shells for what they are worth, in the goods you are trading them for, at any time you want to trade them.

Keeping in mind that to not have a unit of account, and to not have money, is to trade shells among all other things, for the price determined in each of those things.

Does Saifedean mean to argue that early man took account of all this and used rational deduction to order the saleability of his shells? Does he know it is the work of Hayek, to which no doubt Saifedean credits his argument (he couldn’t dare try to credit Mises!), to say that such calculations are increasingly unscalable?

Were there many types of shells on this market before the most saleable arose to be money?

Furthermore in regard to saleability across time, we are expected to believe then that the early proto-money traders would make rational considerations on the futurity of the supplies of each of the shells such that they ordered their saleability, and accurately landed on the shells that were the most scarce and hard to find?

I would like to see the records of this that must then exist.

There is certainly no account of this in the history of man-its absurd to think there would be.

Szabo doesn’t reference one.

On the Possibility of a Money Medium Arising As a By-Product of an Unrelated Action

In our theory, that extends Szabo, we argue that shells were available intrinsically as a byproduct of other actions such as eating. This still doesn’t put them on the market but our theory explains that as well.

Saifedeans theory is that the value in ‘endowed’ commodities with otherwise no market value is derived from their scarcity and difficulty to find.

On the Effects on the Saleability of Rai Stones When Adding Them to An Economy

If we consider Rai stones, somehow as good money, that don’t move, aren’t at all divisibile, but do move, from social order and do divide by social order, and can be lost under sea forever, but can’t be stolen or lost because of social code we can think about their scarcity in regard to the cost to make or get more stones.

Does a villager think to themself, ‘If I go carve a Rai stone I can be wealthy from only the labor of procuring it?’ Does the village believe if they double their Rai stones they double their wealth, such that they can stop tending to their crops and simply produce Rai stones?

These are the anthropological incongruencies that Saifedean’s argument implies.

Rai stones are exactly as scarce as their society deem them to be. This is something all of the economic schools will support. But, paradoxically, or what is unexplainable is they aren’t then necessarily as valuable as they are scarce.

The society doesn’t get more or less wealthy depending on the number of Rai Stones they have. There is something else involved.

That paradox is exactly what Szabo’s work explains and exactly what shows Saifedean’s argument to be inconsistent.

An anthropologically inconsistent construction-his readers can’t vet it and he hopes his argument is too complexly distant from the anthropologists to get caught in the inconsistency.

Saifedean’s Construction of Bitcoin as the Most Saleable Good

Historical accounts show that the most salable seashells were usually the ones that were scarcer and harder to find, because these would hold value more than the ones that can be found easily.3

Saifedean’s account of the history of salability of different goods is an attempt to build an argument that Bitcoin is the most saleable good because it has all of the properties that all of the most saleable goods have (minus a reason to have a commodity price in the first place):

saifedeadean{Bitcoin}

Saifedean wraps Bitcoin with his own wrapping of Menger by saying that Bitcoin is to be the most saleable good because it has all of the same properties that all of the most saleable goods of the past had.

He’s not saying, or can’t say ‘Bitcoin is the most saleable good’ because it doesn’t readily fetch a market price, and less so over time and space (there is sometimes great cost to transact with it and that cost changes as well as its value).

Instead he’s saying that if you look at the properties that the most saleable goods have historically (different from the qualities of saleability that Menger lists!), you will find Bitcoin to be the commodity that has the most of each of those qualities.

On the Saleability of Bitcoin and Bitcoin Exchanges

Exchanges that hold Bitcoin are examples of the effects of the limitations of Bitcoin’s salability, increasing the cost and distance as to where the Bitcoin’s are stored. The mental cost and the legality of holding one’s own Bitcoins affects this and it's a dramatically changing tide. These factors run against the idea of Bitcoin as the most saleable good. This point helps us understand saleability in the context of Bitcoin.

On the Coincidental Similarities Between the Coincidental Properties of The Most Saleable Goods and Bitcoin

All that is left for Saifedean is to declare that Bitcoin somehow perfectly has all of the qualities of the most saleable goods of our history. It is such an amazing match that one is left wondering what Saifedean would say if there ever was a quality of a most saleable good of our past that Bitcoin did not possess.

It’s not a coincidence Saifedean would say, Satoshi was obviously an Austrian minded engineer of money.

We disagree. We believe Satoshi deconstructed the Austrian School.

And of course Bitcoin doesn’t have all of the perfectly ideal qualities of all of the things that were none of the history of money. And Satoshi never implied it.

Many people custody it for these reasons. Many people avoid it because of the way the law treats it. It’s costly to send. It’s value it’s very reliable. It’s only socially scarce. It requires electricity to exist etc.

It’s very interesting. It's very valuable. But it's also limited in many ways as money.

Nick Szabo On Satosh’s Brilliance

In fact its Szabo, in his essay Blockchains and Social Scalability, that explains of Satoshi that the limitations of Bitcoin as being a perfect money are part of his brilliant design:

The secret to Bitcoin’s success is certainly not its computational efficiency or its scalability in the consumption of resources. Specialized Bitcoin hardware is designed by highly paid experts to perform only one particular function – to repetitively solve a very specific and intentionally very expensive kind of computational puzzle. That puzzle is called a proof-of-work

…

As a result, the Bitcoin blockchain cannot process as many transactions per second as a traditional payment network such as PayPal or Visa. Bitcoin offends the sensibilities of resource-conscious and performance-measure-maximizing engineers and businessmen alike.

Szabo has a different idea for what is the usefulness of Bitcoin:

Instead, the secret to Bitcoin’s success is that its prolific resource consumption and poor computational scalability is buying something even more valuable: social scalability.

Szabo highlights not only the existence of the limitations of Bitcoin but the importance of the acceptance of them. He calls it the observation of Satoshi’s brilliant tradeoff (effectively computational inefficiency for social scalability):

In computer science there are fundamental security versus performance tradeoffs.

These necessary tradeoffs, sacrificing performance in order to achieve the security necessary for independent, seamlessly global, and automated integrity, mean that the Bitcoin blockchain itself cannot possibly come anywhere near Visa transaction-per-second numbers and maintain the automated integrity that creates its distinctive advantages versus these traditional financial systems.

That is Satoshi’s brilliant tradeoff.

Szabo notes the weaknesses Bitcoin has that Saifedean means to deny:

Bitcoin supports a lower rate transactions than Visa or PayPal, but due to its stronger automated security these can be much more important transactions. Anybody with a decent Internet connection and a smart phone who can pay $0.20-$2 transaction fees – substantially lower than current remitance fees -- can access Bitcoin any where on the globe. Lower value transactions with lower fees will need to be implemented on peripheral bitcoin networks.

On Saifedeanian Consistency and Peripheral Bitcoin Networks

Remember that in Saifedean’s system:

A theoretically ideal money would be one whose supply is fixed, meaning nobody could produce more of it.

We would expect then in order to re-sovle the inconsistency of reaching for peripheral Bitcoin networks that in the Saifedeanian system monetary networks that arise to fulfill the qualities of an ideal money that Bitcoin can’t fulfill they would be divided into either two categories:

1. Those that can be wrapped as Bitcoin (ie lightning network)

2. Those that can’t be wrapped as Bitcoin and so must be wrapped with a negative religious stigma

This explains the ‘shit-coin’ phenomenon of calling other currencies that aren’t Bitcoin ‘shit-coin’. A wrapper of an ancient tradition of wrapping things we mean to signal to others as unworthy of consideration with the concept of our feces.

Not to say Saifedean’s system is responsible for the shitcoin calling phenomenon, rather its a shallow construction to share with other systems that need to adopt it for their own consistency.

As silly as the actions are, we think it might be worthwhile to study the deconstruction of such behavior and superficial attempts to stave off death by inconsistency.

Saifedean And the Criminalization of Keynes

Now that we understand how to deconstruct Saifedean’s system consider the following excerpt from a youtube talk he gives:

I think if you're familiar with um academic economics and I say this this often essentially what goes on at universities and most economics think tanks is just excuses for money printing it's just here's a bunch of money and come up with more stupid Keyes and ideas for why we need to print more money and of course a lot of people benefit from all of that money Printing and it costs peanuts to get a university professor at some whore house like Harvard or Yale or Princeton to come up with excuses for why yeah we need to print a bunch of money in order to make things better whatever it is and it's the same thing with all of this geopolitics all these think tanks all this foreign policy people think there's actual scholarship there people think those people are anything respectable in fact they're just prostitutes there is no Rhyme or Reason behind any of this garbage that is manufactured as intellectual ideas you know all of these people that you mentioned all of these think tanks I mean there is no logic behind any of it there's no there's nothing that is intellectually defensible it is all built it's a giant edifice that's built on Keynesian bullshit idea that the more we spend the better off we are the more we spend on weapons the better off we are and if we spend money on Wars then it's not a bad thing because yeah sure you know a lot of innocent people are going to die but that's just what happens when you're the strongest country in the world don't you want to be the strongest country in the world if we don't do it others will do it to us and so therefore we need to keep printing money and we need to keep killing people we need to keep doing this and of course as you said it's chump change for the in military-industrial complex but it is enormous amounts of money for the war of ideas it's very easy you know with with with Boeing and Ron and locked Martin's chump change you can shape all of the discourse in all of America's whouse universities all of America's whore house think tanks all of America's whore house media it's very easy journalists are very cheap kinds of prostitutes as are University professors as are all of these despicable pieces of shit in all of these think tanks that are coming up with all of these excuses for why we need to go and kill all of these foreigners none of that makes any sense and there's absolutely no logic to it and it's all in my opinion I keep coming back to this it all rests on Keynesian foundations it all rests on the idea that printing money is Costless and Military spend is good this is the military keynesianism is really a very very yeah it's a very dangerous idea and it is something that is taught at universities and it is absolutely criminal

Is it possible for a system to assert its own consistency any more than this? Observe the tropes. These are all the axioms needed to make the inconsistency of his argument consistent.

On Time Preference and Evil{Inflation}

Time preference is another main theme of Saifedean’s system. The idea of more stable or better quality money inspiring one to hold onto it until or in order to make more prudent choices (low time preference) than one in a world with inferior money where agents are thus incentive to spend their money like a hot potato.

Keynes is often referenced as saying "In the long run we are all dead." It is something that those that frantically and vocally argue against what is their wrapping of inflation don’t understand.

The observation of Keynes is how much it makes sense to the rational individual to sacrifice a small about of the quality of their money, or even the value of their savings, in order to serve the greater economy as a whole, in times of strife, knowing the the process will not really be felt to the individual and will equillbriate in spans beyond the individual's life.

That the general individual doesn’t seem concerned about 2% inflation isn’t because they are ignorant, fooled, uniwise, etc. but rather the observation of Keynes is truthful.

This highlights a motivation for a call to take action by the Saifedeanians. A crusade to educate and purify the world of unholy falsehoods claiming to be truths.

On the Low Time Preference of Stakes and Type of Time Preference Saifedean’s Expensive Courses Are

The concern is that Saifedean is wrapping the idea of expensive stake as the concept of ‘low time preference’ choice but really while convincing his audience that their investment into an inconsistent (and anthropologically/historically unsound) system of economics is a low preference choice he’s really just taking money from unfortunate, downtrodden, unsuspecting persons and using it to make fiat based investments his system couldn’t possible support without again breaking its own consistency.

Stock-To-Flow and PlanB as Plan B

Here we note the shallowness of complexity between our deconstruction of Saifedean's arguments and the claim of a well known internet personality 'planB' aka @100trillionUSD that memes the argument that Bitcoin's scarcity and particularly in regard to its stock-t-flow (or ration of additional units to total existing supply), gives it an intrinsic range of value that it will follow.

We are noting the shallowness of the distance complexity between these two arguments and suggesting the complexity distance to be nearly non-existent.

On Saifedean’s Inconsistent System and Islam and Islamic Authority

It is our recommendation that leaders in Islam declare Saifedean's work unholy. Its not only dangerous to rational logic of Islam but also to the relationship between Islam and the West or any entities that Islam would otherwise benefit from peaceable cooperation with. Saifedean’s inconsistent system would harm any such potential harmony, corrupting the minds of either side. His ideas, in spirit, should be violently opposed. They are destructive to Islam.