{"id":29439,"date":"2022-11-09T07:01:36","date_gmt":"2022-11-09T15:01:36","guid":{"rendered":"https:\/\/blogs.georgefox.edu\/dlgp\/?p=29439"},"modified":"2022-11-09T06:03:33","modified_gmt":"2022-11-09T14:03:33","slug":"buy-gold-buy-bitcoin","status":"publish","type":"post","link":"https:\/\/blogs.georgefox.edu\/dlgp\/buy-gold-buy-bitcoin\/","title":{"rendered":"The Jury Is Still Out"},"content":{"rendered":"

As a college student studying social work and psychology, I was required to take two economics classes as part of my core classwork. I am pretty sure that in another life, I would have gone on to study business and economics in pursuit of a life of entrepreneurship. Well, maybe that, or I would have pursued my other dream of owning and working on a ranch\ud83d\ude0a. Since first buying this book months ago in preparation for our fall class, I have been eager to read The Bitcoin Standard<\/em> as I have a genuine interest in economics, and I knew virtually nothing of bitcoins before this book.<\/p>\n

Saifedean Ammous, the author of this book, is a brilliant man with extensive knowledge of cryptocurrency. Born in Palestine, Ammous currently lives in Lebanon, serving as the Assistant Professor of Economics at the Lebanese American University. The book is divided into three parts. Part one provides an overview of money; part two, a historical framework for the use of money; and finally, part three explains bitcoin and how it works. Michael Saylor, who served as the CEO of MicroStrategy, which specializes in business intelligence and cloud-based services, wrote in the forward: \u201cAs I write these words, 99% of our assets are stored in bitcoin, with the remaining 1% in our local currencies required to do business in various markets.\u201d[1]<\/a> I had never heard of Saylor, but after a quick Google search, it was easy to see that he has been wildly successful in his work endeavors. As of August 2, 2022, Saylor\u2019s net worth was $500 million![2]<\/a> Saylor saw an opportunity with bitcoin such that he was willing to risk 99% of the company\u2019s assets in cryptocurrency.<\/p>\n

Allow me to provide a brief synopsis of the book and bitcoin. Bitcoin was created by an anonymous computer programmer and rolled out on October 31, 2008, with an email that said, \u201cnew electronic cash system that\u2019s fully peer-to-peer, with no trusted third party.\u201d[3]<\/a> In the beginning, 5,050 bitcoins sold for $5.02. As of today, the value of one bitcoin is $20,583![4]<\/a> More or less, bitcoin is a digital currency that can be purchased, sold, or exchanged like any other currency.<\/p>\n

In providing an overview of the concept of money, Ammous highlights two keywords, market demand \u2013 <\/em>\u201cdemand for consuming or holding the good for its own sake\u201d \u2013 and monetary demand \u2013 <\/em>\u201cdemand for a good as a medium of exchange and store of value.\u201d[5]<\/a> He provides a robust argument that the clear winner throughout the ages has been gold, \u201cwhich maintains its monetary role due to unique physical characteristics that differentiate it from other commodities: first, gold is so chemically stable that it is virtually impossible to destroy, and second, gold is impossible to synthesize from other materials.\u201d[6]<\/a> Ammous has some serious difficulties with government-provided and controlled money in that by increasing the supply of money, in all actuality, they are decreasing the value of that currency. Later, Ammous provides two more key definitions: sound money<\/em> \u2013 meaning that there is an enforced measure of trustworthiness and accountability with the government \u2013 and unsound money \u2013 <\/em>more or less, fake money with no sound financial backing.[7]<\/a> Near the end of the book, Ammous makes a case that the \u201cnew gold\u201d is bitcoin as it \u201crepresents a new technological solution to the money problems, born out of the digital age\u2026 [and] attempts at producing digital money to deliver something which was almost unimaginable before it was invented.\u201d[8]<\/a> Much like gold is limited and impossible to reproduce, bitcoin is also limited in that the supply is capped out at 21,000,000 coins that can, in turn, be divisible into 100,000,000 satoshis. Also, bitcoin is antifragile in that any attempt to hack the system has failed and only served to strengthen its security.[9]<\/a><\/p>\n

So why read this book as we study leadership?<\/em> I have a few thoughts:<\/p>\n