Saifedean Ammous: Austrian-school economist, anarchist, and author of The Bitcoin Standard and The Fiat Standard, considered one of Bitcoin's most influential thinkers. Palestinian-Jordanian, formerly taught macroeconomics at the university level.
What this episode covers
Saifedean Ammous joins Lex Fridman for a four-hour first-principles tour of money, economics, and Bitcoin. He defines money as the most saleable good, argues that 'hard' money (resistant to supply increase) wins historically, and explains why gold, then fiat, then Bitcoin sit on that spectrum. He delivers a scathing critique of Keynesian economics and central banking, tracing the birth of fiat to the Bank of England secretly financing World War I in 1914. The conversation ties fiat money to permanent war, high time preference, and societal decay, while making the case for Bitcoin as the hardest money ever invented. It closes with Bitcoin's energy debate, criticism of altcoins and proof-of-stake, Saifedean's Palestinian background, and advice to young people.
Recommended on this episode
The Block Size War
Jonathan Bier
“there's a recent book that discusses this in detail called the block size war by jonathan beer it's a great description”— guest
The guest's own work
The Bitcoin Standard
Saifedean Ammous
“you've written the the book bitcoin standard from 2018 i believe yeah and then a new book called fiat standard”— Lex Fridman
The Fiat Standard
Saifedean Ammous
“and then a new book called fiat standard uh the bitcoin standard just considered kind of the bible”— Lex Fridman
Also referenced (named, not recommended)
Principles of Economics
Carl Menger
“when karl menger the father of the school wrote a book called principles of economics and essentially invented marginal analysis”— guest
The Theory of Money and Credit
Ludwig von Mises
“he wrote a book in 1912 called the theory of money and credit and then in the 40s he wrote human action”— guest
Human Action
Ludwig von Mises
“and then in the 40s he wrote human action which is a big treatise on economics”— guest
The White Pill
Michael Malice
“recently he's working on a book called uh the white pill and he's been every every time i see him”— guest
Big reveals from this episode
- Saifedean argues the collective belief / 'hallucination' theory of money has exactly zero explanatory power and that fiat was always 'born out of fraud.'
- He admits that despite being a full anarchist, he is becoming increasingly sympathetic to monarchy as the system most likely to preserve freedom.
- He recounts how fiat was born when the Bank of England secretly had two officials buy unsold WWI bonds with bank credit, only uncovered in 2017.
- He claims the best way to fight Hitler would have been to never fight WWI, and that without fiat-financed WWI, Hitler would never have risen.
- He flatly denies being Satoshi Nakamoto and says Satoshi's disappearance is the single most important fact about Bitcoin.
- On Bitcoin's energy use, he says 'because it's worth it' and calls portraying energy consumption as bad 'truly criminal.'
- He stands by calling Ethereum a scam and proof-of-stake either cluelessness or a con.
- He shares that being Palestinian, growing up in Ramallah and watching settlement expansion, is the tragedy of his life and a motivation for his Bitcoin work.
Worth remembering
- Gold's stockpile grows only ~1.5-2% per year, the lowest of any metal, which is why it became money.
- In 1870 Germany used its Franco-Prussian War indemnity to switch to a gold standard, collapsing silver's value ever since.
- Saifedean argues diamonds are 'a scam,' popularized for weddings only after gold ownership was banned in the 1930s.
- He notes that 1970s stagflation (high inflation plus high unemployment) single-handedly refutes the Keynesian model.
- He calculates the global fiat money supply has grown ~14% per year (weighted) over the last 60 years versus ~1.5% for gold.
- Fiat money is 'mined' through credit creation: banks create fresh money when they issue loans, not from deposits.
- Bitcoin's supply growth is currently ~1.8% heading toward zero, capped at 21 million coins forever.
- Premature babies in incubators depend on reliable 24-hour electricity, illustrating why cheap energy is life-or-death.
- Saifedean believes Bitcoin's biggest prize is government bonds (~$120 trillion), with gold being merely 'the appetizer.'
- He argues Bitcoin is the only technology that can 'end World War I,' since fiat removed the natural cost-restraint on total war.