The Fiat Standard

This text excerpts Saifedean Ammous's The Fiat Standard (2021), which critically analyzes fiat monetary systems. The book contrasts fiat money with Bitcoin, highlighting fiat's operational mechanics, including credit creation as "mining" and the central bank's role. Ammous explores the societal and economic consequences of fiat, such as inflation, business cycles, and government control over various sectors (food, education, science, energy). He argues that fiat's inherent weaknesses, particularly its susceptibility to manipulation and its inability to maintain value over time, make it inferior to Bitcoin. Finally, the text examines Bitcoin's scalability and its potential to replace fiat as a global monetary system, considering both its advantages and potential challenges.