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The Art of War Quotes

The Art of War

The Art of War (Chinese: 孫子兵法; lit. ‘Sun Tzu’s Military Method’, pinyin: Sūnzi bīngfǎ) is an ancient Chinese military treatise dating from the Late Spring and Autumn Period (roughly 5th century BC).

The work, which is attributed to the ancient Chinese military strategist Sun Tzu (“Master Sun”), is composed of 13 chapters. Each one is devoted to a different set of skills or art related to warfare and how it applies to military strategy and tactics.

For almost 1,500 years it was the lead text in an anthology that was formalized as the Seven Military Classics by Emperor Shenzong of Song in 1080.

The Art of War remains the most influential strategy text in East Asian warfare and has influenced both East Asian and Western military theory and thinking and has found a variety of applications in a myriad of competitive non-military endeavors across the modern world including espionage, culture, politics, business, and sports.

When you start to read Sun Tzu’s words, you may realize that they have very real applications to modern life, especially if you are in a position of leadership or if you deal regularly with strategic questions.

These musings can be applied to practical problems you may be trying to solve, and they can also be good starting points for more theoretical reflection.

Topics that span from philosophy and wisdom to strategy and leadership, here are the most notable quotes from The Art of War.

Quotes on the Philosophy of War

  • “The art of war is of vital importance to the State. It is a matter of life and death, a road either to safety or to ruin.”
  • “All warfare is based on deception.”
  • “It is only one who is thoroughly acquainted with the evils of war that can thoroughly understand the profitable way of carrying it on.”
  • “The skillful soldier does not raise a second levy, neither are his supply-wagons loaded more than twice.”
  • “To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.”
  • “He will win who knows when to fight and when not to fight.”
  • “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
  • “What the ancients called a clever fighter is one who not only wins, but excels in winning with ease.”
  • “Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated.”
  • “Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing.”
  • “Success in warfare is gained by carefully accommodating ourselves to the enemy’s purpose.”
  • “Energy may be likened to the bending of a crossbow; decision, to the releasing of the trigger.”
  • “Anger may in time change to gladness; vexation may be succeeded by content. But a kingdom that has once been destroyed can never come again into being; nor can the dead ever be brought back to life.”
  • “If your opponent is of choleric temper, seek to irritate him. Pretend to be weak, that he may grow arrogant.”
  • “In war, practice dissimulation, and you will succeed.”
  • “If the enemy leaves a door open, you must rush in.”
  • “We cannot enter into alliances until we are acquainted with the designs of our neighbors.”
  • “The experienced soldier, once in motion, is never bewildered; once he has broken camp, he is never at a loss.”
  • “If you know the enemy and know yourself, your victory will not stand in doubt.”

Quotes on War and Leadership

It is clear throughout The Art of War that victory is explicitly related to the strength of an army’s leader. Sun Tzu’s advice for generals and commanders applies to many kinds of leaders.

  • “The general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand.”
  • “The general who is skilled in defense hides in the most secret recesses of the earth; he who is skilled in attack flashes forth from the topmost heights of heaven.”
  • “The consummate leader cultivates the moral law, and strictly adheres to method and discipline; thus it is in his power to control success.”
  • “Simulated disorder postulates perfect discipline; simulated fear postulates courage; simulated weakness postulates strength.”
  • “Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to battle will arrive exhausted.”
  • “The quality of decision is like the well-timed swoop of a falcon which enables it to strike and destroy its victim.”
  • “All men can see the tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.”
  • “Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances.”
  • “He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain.”
  • “The difficulty of tactical maneuvering consists in turning the devious into the direct, and misfortune into gain.”
  • “Maneuvering with an army is advantageous; with an undisciplined multitude, most dangerous.”
  • “We are not fit to lead an army on the march unless we are familiar with the face of the country—its mountains and forests, its pitfalls and precipices, its marshes and swamps.”
  • “Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical.”
  • “No ruler should put troops into the field merely to gratify his own spleen; no general should fight a battle simply out of pique.”
  • “What enables the wise sovereign and the good general to strike and conquer, and achieve things beyond the reach of ordinary men, is foreknowledge.”
  • “When the general is weak and without authority; when his orders are not clear and distinct; when there are no fixed duties assigned to officers and men, and the ranks are formed in a slovenly haphazard manner, the result is utter disorganization.”
  • “If fighting is sure to result in victory, then you must fight, even though the ruler forbid it; if fighting will not result in victory, then you must not fight even at the ruler’s bidding.”
  • “Regard your soldiers as your children, and they will follow you into the deepest valleys; look upon them as your own beloved sons, and they will stand by you even unto death.”
  • “The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom.”
  • “A leader leads by example not by force.”

Quotes on War and Strategy

Sun Tzu’s strategic counsel can still be used in the 21st century. Whether you are creating a business strategy or devising steps to pursue a personal goal, these quotes from The Art of War may offer some valuable insights and guidance.

  • “Hold out baits to entice the enemy. Feign disorder, and crush him.”
  • “If equally matched, we can offer battle; if slightly inferior in numbers, we can avoid the enemy; if quite unequal in every way, we can flee from him.”
  • “Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory.”
  • “The control of a large force is the same principle as the control of a few men: it is merely a question of dividing up their numbers.”
  • “The clever combatant looks to the effect of combined energy, and does not require too much from individuals.”
  • “You can be sure of succeeding in your attacks if you only attack places which are undefended.”
  • “O divine art of subtlety and secrecy! Through you we learn to be invisible, through you inaudible; and hence we can hold the enemy’s fate in our hands.”
  • “Numerical weakness comes from having to prepare against possible attacks; numerical strength, from compelling our adversary to make these preparations against us.”
  • “Knowing the place and the time of the coming battle, we may concentrate from the greatest distances in order to fight.”
  • “In making tactical dispositions, the highest pitch you can attain is to conceal them.”
  • “Carefully compare the opposing army with your own, so that you may know where strength is superabundant and where it is deficient.”
  • “To take a long and circuitous route, after enticing the enemy out of the way, and though starting after him, to contrive to reach the goal before him, shows knowledge of the artifice of deviation.”
  • “Let your rapidity be that of the wind, your compactness that of the forest.”
  • “In raiding and plundering be like fire, in immovability like a mountain.”
  • “Place your army in deadly peril, and it will survive; plunge it into desperate straits, and it will come off in safety.”
  • “Forestall your opponent by seizing what he holds dear, and subtly contrive to time his arrival on the ground.”
  • “Walk in the path defined by rule, and accommodate yourself to the enemy until you can fight a decisive battle.”
  • “At first, then, exhibit the coyness of a maiden, until the enemy gives you an opening; afterwards emulate the rapidity of a running hare, and it will be too late for the enemy to oppose you.”
  • “If it is to your advantage, make a forward move; if not, stay where you are.”
  • “If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven and know Earth, you may make your victory complete.”
  • “Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”

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Totalitarian Governments..

Totalitarianism is a form of government and political system that prohibits all opposition parties, outlaws individual opposition to the state and its claims, and exercises an extremely high degree of control and regulation over public and private life.

It is regarded as the most extreme and complete form of authoritarianism.

In totalitarian states, political power is often held by autocrats, such as  dictators  and absolute monarchs, who employ all-encompassing campaigns in which propaganda is broadcast by state-controlled mass media in order to control the citizenry.

It remains a useful word but the old 1950s theory was considered to be outdated by the 1980s,and is defunct among scholars.

The proposed concept gained prominent influence in Western anti-communist and McCarthyist political discourse during the Cold War era as a tool to convert pre-World War IIanti-fascism into post-war anti-communism.

Leaders who have been described as totalitarian rulers, from left to right and top to bottom in picture, include Joseph Stalin, former General Secretary of the Communist Party of the Soviet Union; Adolf Hitler, former Führer of Nazi Germany; Augusto Pinochet, former President of Chile; Mao Zedong, former Chairman of the Communist Party of China; Benito Mussolini, former Duce of Fascist Italy; and Kim Il-sung, the Eternal President of the Republic of North Korea

As a political ideology in itself, totalitarianism is a distinctly modernist  phenomenon, and it has very complex historical roots. Philosopher Karl Popper traced its roots to Plato, Georg Wilhelm Friedrich Hegel‘s conception of the state, and the political philosophy of Karl Marx, although Popper’s conception of totalitarianism has been criticized in academia, and remains highly controversial.

Other philosophers and historians such as Theodor W. Adorno and Max Horkheimer trace the origin of totalitarian doctrines to the Age of Enlightenment, especially to the anthropocentrist idea that:

“Man has become the master of the world, a master unbound by any links to nature, society, and history.”

In the 20th century, the idea of absolute state power was first developed by Italian Fascists, and concurrently in Germany by a jurist and Nazi academic named Carl Schmitt during the Weimar Republic in the 1920s.

Benito Mussolini, the founder of Italian Fascism, defined fascism as such: “Everything within the state, nothing outside the state, nothing against the state.”

Schmitt used the term Totalstaat (lit. ’Total state’) in his influential 1927 work titled The Concept of the Political, which described the legal basis of an all-powerful state.

Totalitarian regimes are different from other authoritarian regimes, as the latter denotes a state in which the single power holder, usually an individual dictator, a committee, a military junta, or an otherwise small group of political elites, monopolizes political power.

A totalitarian regime may attempt to control virtually all aspects of social life, including the economy, the education system, arts, science, and the private lives and morals of citizens through the use of an elaborate ideology. It can also mobilize the whole population in pursuit of its goals.

Definition

Totalitarian regimes are often characterized by extreme political repression, to a greater extent than those of authoritarian regimes, under an undemocratic government, widespread personality cultism around the person or the group which is in power, absolute control over the economy, large-scale censorship and mass surveillance systems, limited or non-existent freedom of movement (the freedom to leave the country), and the widespread usage of state terrorism.

Other aspects of a totalitarian regime include the extensive use of internment camps, an omnipresent secret police, practices of religious persecution or racism, the imposition of theocratic rule or state atheism, the common use of death penalties and show trials, fraudulent elections (if they took place), the possible possession of weapons of mass destruction, a potential for state-sponsored mass murders and genocides, and the possibility of engaging in a war, or colonialism against other countries, which is often followed by annexation of their territories.

Historian Robert Conquest describes a totalitarian state as a state which recognizes no limit on its authority in any sphere of public or private life and extends that authority to whatever length it considers feasible.

Totalitarianism is contrasted with authoritarianism. According to Radu Cinpoes, an authoritarian state is “only concerned with political power, and as long as it is not contested it gives society a certain degree of liberty.”

Cinpoes writes that authoritarianism “does not attempt to change the world and human nature.”

In contrast, Richard Pipes stated that the officially proclaimed ideology “penetrating into the deepest reaches of societal structure, and the totalitarian government seeks to completely control the thoughts and actions of its citizens.”

Carl Joachim Friedrich wrote that “[a] totalist ideology, a party reinforced by a secret police, and monopolistic control of industrial mass society are the three features of totalitarian regimes that distinguish them from other autocracies.”

Visualization of the AES round function

Advanced Encryption Standard

The Advanced Encryption Standard (AES), also known by its original name Rijndael (Dutch pronunciation: [ˈrɛindaːl]), is a specification for the encryption of electronic data established by the U.S. National Institute of Standards and Technology (NIST) in 2001.

AES is a variant of the Rijndael block cipher developed by two  Belgian  cryptographers, Vincent Rijmen and Joan Daemen, who submitted a proposalto NIST during the AES selection process.

Rijndael is a family of ciphers with different key and block sizes. For AES, NIST selected three members of the Rijndael family, each with a block size of 128 bits, but three different key lengths: 128, 192 and 256 bits.

AES has been adopted by the U.S. government. It supersedes the Data Encryption Standard (DES), which was published in 1977.

The algorithm described by AES is a symmetric-key algorithm, meaning the same key is used for both encrypting and decrypting the data.

In the United States, AES was announced by the NIST as U.S. FIPS PUB 197 (FIPS 197) on November 26, 2001.

This announcement followed a five-year standardization process in which fifteen competing designs were presented and evaluated, before the Rijndael cipher was selected as the most suitable.

AES is included in the ISO/IEC 18033-3  standard. AES became effective as a U.S. federal government standard on May 26, 2002, after approval by the U.S. Secretary of Commerce.

AES is available in many different encryption packages, and is the first (and only) publicly accessible cipher approved by the U.S. National Security Agency (NSA) for top secret information when used in an NSA approved cryptographic module.

Andreas M. Antonopoulos (born 1972 in London) is a British-Greek Bitcoin advocate, tech entrepreneur, and author.

He is a host on the Speaking of Bitcoin podcast (formerly called Let’s Talk Bitcoin!) and a teaching fellow for the M.Sc. Digital Currencies at the University of Nicosia.

Antonopoulos was born in 1972 in London, UK, and moved to Athens, Greece during the Greek Junta.

He spent his childhood there, and at the age of 17 returned to the UK.

Antonopoulos obtained his degrees in Computer science and Data Communications, Networks and Distributed Systems from University College London.

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All Credit goes to Andreas M. Antonopoulos

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“THE FIAT STANDARD”

I am happy to share with you this chapter from my forthcoming book, The Fiat Standard, which will be out in November in hardcover, audio, and ebook formats.

Chapter 1: Introduction

On August 6, 1915, His Majesty’s Government issued this appeal:

“In view of the importance of strengthening the gold reserves of the country for exchange purposes, the Treasury has instructed the Post Office and all public departments charged with the duty of making cash payments to use notes instead of gold coins whenever possible.

The public generally are earnestly requested, in the national interest, to cooperate with the Treasury in this policy by

(1) paying in gold to the Post Office and to the Banks;

(2) asking for payment of cheques in notes rather than in gold;

(3) using notes rather than gold for payment of wages and cash disbursements generally”.

August 6th, 1915 – His Majesty’s Government

With this obscure and largely forgotten announcement, the Bank of England effectively began the global monetary system’s move away from a gold standard, in which all government and bank obligations were redeemable in physical gold.

At the time, gold coins and bars were still widely used worldwide, but they were of limited use for international trade, which necessitated resorting to the clearance mechanisms of international banks. 

Chief among all banks at the time, the Bank of England’s network spanned the globe, and its pound sterling had, for centuries, acquired the reputation of being as good as gold. 

Instead of the predictable and reliable stability naturally provided by gold, the new global monetary standard was built around government rules, hence its name. The Latin word fiat means ‘let it be done’ and, in English, has been adopted to mean a formal decree, authorization, or rule.

It is an apt term for the current monetary standard, as what distinguishes it most is that it substitutes government dictates for the judgment of the market.

Value on fiat’s base layer is not based on a freely traded physical commodity, but is instead dictated by authority, which can control its issuance, supply, clearance, and settlement, and even confiscate it at any time it sees fit.

With the move to fiat, peaceful exchange on the market no longer determined the value and choice of money. Instead, it was the victors of world wars and the gyrations of international geopolitics that would dictate the choice and value of the medium that constitutes one half of every market transaction.

While the 1915 Bank of England announcement, and others like it at the time, were assumed to be temporary emergency measures necessary to fight the Great War, today, more than a century later, the Bank of England is yet to resume the promised redemption of its notes in gold.

Temporary arrangements restricting note convertibility into gold have turned into the permanent financial infrastructure of the fiat system that took off over the next century.

Never again would the world’s predominant monetary systems be based on currencies fully redeemable in gold.

The above decree might be considered the equivalent of Satoshi Nakamoto’s email to the cryptography mailing list announcing Bitcoin, but unlike Nakamoto, His Majesty’s Government provided no software, white paper, nor any kind of technical specification as to how such a monetary system could be made practical and workable. Unlike the cold precision of Satoshi’s impersonal and dispassionate tone, His Majesty’s Government relied on appeal to authority, and emotional manipulation of its subjects’ sense of patriotism.

Whereas Satoshi was able to launch the Bitcoin network in operational form a few months after its initial announcement, it took two world wars, dozens of monetary conferences, multiple financial crises, and three generations of governments, bankers, and economists struggling to ultimately bring about a fully operable implementation of the fiat standard in 1971.

Fifty years after taking its final form, and one century after its genesis, an assessment of the fiat system is now both possible and necessary. Its longevity makes it unreasonable to keep dismissing the fiat system as an irredeemable fraud on the brink of collapse, as many of its detractors have done for decades. Many people at the end of their life today have never used anything but fiat money, and neither did their long-deceased parents. This cannot be written off as an unexplained fluke, and economists should be able to explain how this system functions and survives, despite its many obvious flaws.

There are, after all, plenty of markets around the world that are massively distorted by government interventions, but they nonetheless continue to survive. It is no endorsement of these interventions to attempt to explain how they persist.

It is also not appropriate to judge fiat systems based on the marketing material of their promoters and beneficiaries in government-financed academia and the popular press.

While the global fiat system so far avoided the complete collapse its detractors would predict, that cannot vindicate its promoters’ advertising of it as a free-lunch-maker with no opportunity cost or consequence. More than fifty episodes of hyperinflation have taken place around the world using fiat monetary systems in the past century. Moreover, the global fiat system avoiding catastrophic collapse is hardly enough to make the case for it as a positive technological, economic, and social development. 

Between the relentless propaganda of its enthusiasts and the rabid venom of its detractors, this book attempts to offer something new: an exploration of the fiat monetary system as a technology, from an engineering and functional perspective, outlining its purposes and common failure modes, and deriving the wider economic, political, and social implications of its use. I believe that adopting this approach to writing

The Bitcoin Standard contributed to making it the best-selling book on bitcoin to date, helping hundreds of thousands of readers across more than 20 languages understand the significance and implications of bitcoin. Rather than focus on the details of how bitcoin operates, I chose to focus on why it operates the way it does, and what the implications are. 

If you have read the Bitcoin Standard and enjoyed my exploration of bitcoin, I hope you will enjoy this exploration of the operation of fiat.

Perhaps counter-intuitively, I believe that by first understanding the operation of bitcoin, you can then better understand the equivalent operations in fiat.

It is easier to explain an abacus to a computer user than it is to explain a computer to an abacus user.

A more advanced technology performs its functions more productively and efficiently, allowing a clear exposition of the mechanisms of the simpler technology, and exposing its weaknesses.

For the reader who has become familiar with the operation of bitcoin, a good way to understand the operation of fiat is by drawing analogy to the operation of bitcoin using concepts like mining, nodes, balances, and proof of work.

My aim is to explain the operation and engineering structure of the fiat monetary system and how it operates, in reality, away from the naive romanticism of governments and banks who have benefited from this system for a century.

The first seven chapters of The Bitcoin Standard explained the history and function of money, and its importance to the economic order. With that foundation laid, the final three chapters introduced bitcoin, explained its operation, and elaborated on how its operation relates to the economic questions discussed in the earlier chapters.

My motivation as an author was to allow readers to understand how bitcoin operates and its monetary significance without requiring them to have a previous background in economics or digital currencies.

Had Bitcoin not been invented, the first seven chapters of The Bitcoin Standard could have served as an introduction to explaining the operation of the fiat monetary system.

This book picks up where Chapter 7 of “The Bitcoin Standard” left off. The first chapters of this book are modeled on the last three chapters of the Bitcoin Standard, except applied to fiat money. 

How does the fiat system actually function, in an operational sense? The success of bitcoin in operating as a bare-bones and standalone free market monetary system helps elucidate the properties and functions necessary to make a monetary system function.

Bitcoin was designed by a software engineer who boiled a monetary system down to its essentials. These choices were then validated by a free market of millions of people around the world who continue to use this system, and currently entrust it to hold more than $300 billion of their wealth.

The fiat monetary system, by contrast, has never been put on a free market for its users to pass the only judgment that matters on it. The all-too-frequent systemic collapses of the fiat monetary system are arguably the true market judgment emerging after suppression by governments.

With bitcoin showing us how an advanced monetary system can function entirely independently of government control, we can see clearly the properties required for a monetary system to operate on the free market, and in the process, better understand fiat’s modes of operation, and all-too-frequent modes of failure.

While fiat systems have not won acceptance on the free market, and though their failings and limitations are many, there is no denying the fact that many fiat systems have worked for large parts of the last century, and facilitated an unfathomably large number of transactions and trades all around the world. Its continued operation makes understanding it useful, particularly as we still live in a world that runs on fiat. Just because you may be done with fiat does not mean that fiat is done with you!

Understanding how the fiat standard works, and how it frequently fails, is essential knowledge for being able to navigate it.

This is a preview chapter from my forthcoming book, The Fiat Standard, which will be out in November in hardcover, audio, and ebook formats.

To begin, it’s important to understand that the fiat system was not a carefully, consciously, or deliberately designed financial operating system like bitcoin; rather, it evolved through a complex process of compromise between political constraints and expedience.

The next chapter illustrates this by examining newly-released historical documents on just how the fiat standard was born, and how it replaced the gold standard, beginning in England in the early twentieth century, completing the transition in 1971 across the Atlantic.

This is not a history book, however, and it will not attempt a full historical account of the development of the fiat standard over the past century, in the same way the Bitcoin Standard did not delve too deeply into the study of the historical development of the bitcoin software protocol. The focus of the first part of the book will be on the operation and function of the fiat monetary system, by making analogy to the operation of the bitcoin network, in what might be called a comparative study of the economics of different monetary engineering systems. 

Chapter 3 examines the underlying technology behind the fiat standard. Contrary to what the name suggests, modern fiat money is not conjured out of thin air through government fiat.

Government does not just print currency and hand it out to a society that accepts it as money. Modern fiat money is far more sophisticated and convoluted in its operation. The fundamental engineering feature of the fiat system is that it treats future promises of money as if they were as good as present money because the government guarantees these promises.

While such an arrangement would not survive in the free market, the coercion of the government can maintain it for a very long time. Government can meet any present financial obligations by diverting them onto future taxpayers or onto current fiat holders through taxes or inflation; and, further, through legal tender laws, the government can prevent any alternatives to its money from gaining traction.

By leveraging their monopoly on the legal use of violence to meet present financial obligations from potential future income, government fiat makes debt into money, forces its acceptance across society, and prevents it from collapsing.

Chapter 4 examines how the fiat network’s native tokens come into existence, using fiat’s antiquated and haphazard version of mining.

As fiat money is credit, credit creation in a fiat currency results in the creation of new money, which means that lending is the fiat version of mining.

Fiat miners are the financial institutions capable of generating fiat-based debt with guarantees from the government and/or central banks.

Unlike with bitcoin’s difficulty adjustment, fiat has no mechanisms for controlling issuance. Credit money, instead, causes constant cycles of expansion and contraction in the money supply with eventual devastating consequences, as this chapter examines.

Chapter 5 explains the topography of the fiat network, which is centered around its only full node, the US Federal Reserve.

The Fed is the only institution that can validate or refuse any transaction on any layer of the network.

Another 200 or so central bank nodes are spread around the world, and these have geographic monopolies on financial and monetary services, where they regulate and manage tens of thousands of commercial bank nodes worldwide.

Unlike with bitcoin, the incentive for running a fiat node is enormous.

Chapter 6 then analyzes balances on the fiat network, and how fiat has the unique feature where many, if not most, users, have negative account balances.

The enormous incentive to mine fiat by issuing debt means individuals, corporations, and governments all face a strong incentive to get into debt.

The monetization and universalization of debt is also a war on savings, and one which governments have persecuted stealthily and mostly quite successfully against their citizens over the last century.

Based on this analysis, Chapter 7 concludes the first section of the book by discussing the uses of fiat, and the problems it solves.

The two obvious uses of fiat are that it allows for the government to easily finance itself, and that it allows banks to engage in maturity-mismatching and fractional reserve banking while largely protected from the inevitable downside.

But the third use of fiat is the one that has been the most important to its survival: salability across space.

From the outset, I will make a confession to the reader. Attempting to think of the fiat monetary system in engineering terms and trying to understand the problem it solves have resulted in giving me an appreciation of its usefulness, and a less harsh assessment of the motives and circumstances which led to its emergence.

Understanding the problem this fiat system solves makes the move from the gold standard to the fiat standard appear less outlandish and insane than it had appeared to me while writing The Bitcoin Standard, as a hard money believer who could see nothing good or reasonable about the move to an easier money. 

Seeing that the analytical framework of “The Bitcoin Standard” was built around the concept of salability across time, and the ability of money to hold its value into the future, and the implications of that to society, the fiat standard initially appears as a deliberate nefarious conspiracy to destroy human civilization.

But writing this book, and thinking very hard about the operational reality of fiat, has brought into sharper focus the property of salability across space, and in the process, made the rationale for the emergence of the fiat standard clearer, and more comprehensible.

For all its many failings, there is no escaping the conclusion that the fiat standard was indeed a solution to a real and debilitating problem with the gold standard, namely its low spatial salability.

More than any conspiracy, the limited spatial salability of gold as global trade advanced allowed the survival of the fiat standard for so long, making its low temporal salability a tolerable problem, and allowing governments worldwide tremendous leeway to bribe their current citizens at the expense of their future citizens by creating the easy fiat tokens that operate their payment networks.

As we take stock of a whole century of operation for this monetary system, a sober and nuanced assessment can appreciate the significance of this solution for facilitating global trade, while also understanding how it has allowed the inflation that benefited governments at the expense of their future citizens.

Fiat may have been a huge step backward in terms of its salability across time, but it was a substantial leap forward in terms of salability across space.

Having laid out the mechanics for the operation of fiat in the first section, the book’s second section, Fiat Life, examines the economic, societal, and political implications of a society utilizing such a form of money with uncertain and usually poor inter-temporal salability.

This section focuses on analyzing the implications of two economic causal mechanisms of fiat money: the utilization of debt as money; and the ability of the government to grant this debt at essentially no cost.

Fiat increasingly divorces economic reward from economic productivity, and instead bases it on political allegiance. This attempted suspension of the concept of opportunity cost makes fiat a revolt against the natural order of the world, in which humans, and all other animals, have to struggle against scarcity every day of their lives.

Nature provides humans with reward only when their toil is successful, and similarly, markets only reward humans when they are able to produce something that others value subjectively.

After a century of economic value being assigned at the point of a gun, these indisputable realities of life are unknown to, or denied by, huge swathes of the world’s population who look to their government for their salvation and sustenance.

The suspension of the normal workings of scarcity through government dictat has enormous implications on individual time preference and decision-making, with important consequences to many facets of life.

In the second section of the book, we explore the impacts of fiat on family, food, education, science, health, fuels, and security. 

While the title of the book refers to fiat, this really is a book about bitcoin, and the first two sections build up the analytical foundation for the main course that is the third part of the book, examining the all-too-important question with which “The Bitcoin Standard” leaves the reader: what will the relationship between fiat and bitcoin be in the coming years?

Chapter 16 examines the specific properties of bitcoin that make it a potential solution to the problems of fiat.

While “The Bitcoin Standard” focused on bitcoin’s intertemporal salability, The Fiat Standard examines how bitcoin’s salability across space is the mechanism that makes it a more serious threat to fiat than gold and other physical monies with low spatial salability.

Bitcoin’s high salability across space allows us to monetize a hard asset itself, and not credit claims on it, as was the case with the gold standard.

At its most basic, bitcoin increases humanity’s capacity for long-distance international settlement by around 500,000 transactions a day, and completes that settlement in a few hours.

This is an enormous upgrade over gold’s capacity, and makes international settlement a far more open market, much harder to monopolize.

This also helps us understand bitcoin’s value proposition as not just in being harder than gold, but also in traveling much faster.

Bitcoin effectively combines gold’s salability across time with fiat’s salability across space in one apolitical immutable open source package.

By being a hard asset, bitcoin is also debt-free, and its creation does not incentivize the creation of debt. By offering finality of settlement every ten minutes, bitcoin also makes the use of credit money very difficult. At each block interval, the ownership of all bitcoins is confirmed by tens of thousands of nodes all over the world. There can be no authority whose fiat can make good a broken promise to deliver a bitcoin by a certain block time.

Financial institutions that engage in fractional reserve banking in a bitcoin economy will always be under the threat of a bank run as long as no institution exists that can conjure present bitcoin at significantly lower than the market rate, as governments are able to do with their fiat. 

Chapter 17 discusses bitcoin scaling in detail, and argues it will likely happen through second layer solutions which will be optimized for speed, high volume, and low cost, but involve trade-offs in security and liquidity.

Chapter 18 builds on this analysis to discuss what banking would look like under a Bitcoin Standard, while chapter 19 discusses how savings would work under such a system.

Chapter 20 studies bitcoin’s energy consumption, how it is related to bitcoin’s security, and how it can positively impact the market for energy worldwide.

With this foundation, the book can tackle the question: how can bitcoin rise in the world of fiat, and what are the implications for these two monetary standards coexisting?

Chapter 21 analyzes different scenarios in which bitcoin continues to grow and thrive, while Chapter 22 examines scenarios where bitcoin fails.

I hope you enjoyed this preview chapter from my forthcoming book, The Fiat Standard, which will be out in November in hardcover, audio, and ebook formats.

All the Credit goes to Saifedean Ammous

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Books I  💚 ly Recomend

“So many books, so little time.”

Frank Zappa

“Good friends, good books, and a sleepy conscience: this is the ideal life.”

Mark Twain

“A book lying idle on a shelf is wasted ammunition.”

Henry Miller, “The Books in My Life“
My Preciousssssssssss 😊🤗💚

Books I  💚ly reccomend

"The Compound effect" - Darren Hardy

"Algorithms to live by" - Brian Christian & Tom Griffiths

"Ikigai" - Hector Garcia & Francesc Mirales

"Thinking, Fast and Slow" - Daniel Kahneman

"Emotional Intelligence" - Daniel Goleman

"The magic of thinking Big" - David Schwartz,PHD

"Sapiens" - Yuval Noah Harrari

"Noise" - Daniel Kahneman & Oliver Sibony & Cass R. Sunsteen

"The tipping point" - Malcom Gladwell

“Blink” – Malcom Gladwell

“David & Goliath” – Malcom Gladwell
 
"The New Human Rights Movement" - Peter Joseph 
(Zeitgeist - watch it 😉 )
 
"Zero to one" - Peter Thiel

"The intelligent Investor" - Benjamin Graham

"How to make friend and be successful" - Dale Carnegie

"Law of Success" - Napoleon Hill

“Think and Grow Rich” – Napoleon Hill

"Positive Thinking" - Napoleon Hill

"The Business Ideea Factory" - Andrii Sedniev

"Common Stocks & Uncommon Profits" - Philip A. Fisher

"The little book of common sense investing" - John C. Boogle

"Freakonomics" - Steven D. Levitt & Stephen J. Dubner

"Influnce" - Robert B. Cialdini,PHD
 
“The Psycology of Money” – Morgan Housel

“The Art of Strategy” – R. L. Wing
 
“Warren Buffet and the Interpretation of Financial Statements” – Mary Buffet & David Clark

“30+ Years of Lessons Learned from Warren Buffet & Charlie Munger” – Daniel Pecaut with Corey Wrenn
 
“CryptoTrading Pro” – Alan T. Norman

“Mastering Bitcoin” – Andreas M. Antonopoulos 

“Mastering Ethereumn” – Andreas M. Antonopoulos

“The Internet of Money” – Andreas M. Antonopoulos

“The Bitcoin Standard” – Saifedean Ammous

“21 Lessons” - Gigi

"Book of Satoshi" - Phil Champagne

"Inventing Bitcoin" - Yan Pritzker, Nicholas Evans

"Digital Gold:The Untold Story of Bitcoin" - Nathaniel Popper

"Grokking Bitcoin" - Kalle Rosenbaum, David A. Harding

"Alghorithms Illuminated" - Tim Roughgarden

"Consumer Psichology and Consumer Behaviour" - Max Mittelstaedt

"Deep Work" - Cal Newport

“Biology of Belief” – Bruce Lipton
 
“The HoneyMoon Effect” – Bruce Lipton

“Ego is the Enemy” – Ryan Holiday

“A history of almost Everything” – Bill Bryson

“Psychology of Money” – Morgan Housel

"Rich Dad, Poor Dad" - Robert T. Kiyosaky

"CashFlow Quadrand" - Robert T. Kiyosaky

"Guide To Investing" - Robert T. Kiyosaky

“Atlas of AI” – Kate Crawford

“Use both sides of your brain” – Tony Buzan

“Mind Maps for kids” – Tony Buzan

“Study Skills” – Tony Buzan

"Mind Map Mastery" - Tony Buzan

“Atomic Habits” – James Clear

“The First and last Freedom” – J Krishnamurti

"The Emperor of all maladies" - Siddhartha Mukherjee

"A brief History of everyone who ever lived" - Siddhartha Mukherjee

"The Gene" - Siddhartha Mukherjee

“Business Adventures” – John Brooks
 
“Code Breaker” – Walter Isaacson

“A thousand Brains” – Jeff Hawkins
 
“Social Engineering” – Christopher Hadnagy

“The Innovators Dilemma” – Clayton M. Christensen

“Critical Path” – R. Buckminster Fuller, Kiyoshi Kuromiya
 
“Price of Tomorrow” – Jeff Booth
 
“Pedagogy of the Oppressed” – Paulo Freire
 
“The Sovereign Individual” – James Dale Davinson,William Rees-Mogg
 
“The Broken CEO” – Chris Pearse
 
“Pragmatic thinking and Learning” – Andy Hunt

“The Creature from Jekill Island” – G. Edward Griffin

“The Wealth of Nations” – Adam Smith

“The Law” – Frederic Bastiat

"The Bastiat Collection:Volume 1" - Frederic Bastiat
 
“Tools of Titans” – Tim Ferris
 
“An Essay concerning Human Understanding” – John Locke

“A treatise on Human Nature” – David Hume,Thomas Hill Green

“The Richest Man in Babylon” – George O. Clason

“Think Again” – Adam Grant

“The Alchemist” – Paulo Coelho

“Black Swan” – Nassim Nicholas Taleb 

"The Rise of the Computer State" - David Burnham

"The Productivity Revolution" - Marc Reklau

"The Power of Habbit" - Charles Duhigg

"The Way Out" - Peter T. Coleman

"Digital Body Language" - Erica Dhawan

"The Promises of Giants" - John Amaechi

"Dedicated" - Pete Davis


"How to Change" - Kathy Milkman

"Substract" - Leidy Klotz

"The Psichogy of Selling" - Brian Tracy

"Awaken the Giant Within" - Tony Robbins

"Crushing It" - Gary Vaynerchuck

"The Power of Now" - Eckhart Tolle

"Sell or be Sold" - Grant Cardone

"The One Thing" - Gary Keller

"The Snowball" - Alice Schroeder

"Tap Dancing to Work:Warren Buffet on practically Anything" - Carol Loomis

"Extreme Ownership" - Jocko Willink, Leif Babin

"The Subtle Art of Not Giving a F*uck" - Mark Manson

"The Miracle Morning" - Hal Elrod, Robert Kiyosaki

"Tools of the Titans" - Tim Ferris

"Die Sheeple! Die!" - DJ Hives

"A few Lessons for Investors and Managers from Warren Buffet" - Peter Bevelin

"Warren's Buffet Ground Rules" - Jeremy Miller

"Limping on Water" - Phil Beuth, K. C. Schulberg

"Shoe Dog" - Bill Knight

"Where are the Customers Yacths" - Fred Schwed Jr.

"40 Chances" - Howard G. Buffet, Warren E. Buffet

"Clash of the Cultures:Investment vs. Speculation" - John C. Bogle, Arthur Lewitt

"Poor Charlie's Almanack" - Charles T. Munger

"Think Again" - Adam Grant

"Charlie Munger-The Complete Investor" - Tren Griffin

"Bull" - Maggie Mahar

"The Hard thing about Hard things" - Ben Horowitz


"Atomic Habbits" - James Clear

“Books are the quietest and most constant of friends; they are the most accessible and wisest of counselors, and the most patient of teachers.”

Charles W. Eliot

“There is no friend as loyal as a book.”

Ernest Hemingway

“Make it a rule never to give a child a book you would not read yourself.”

George Bernard Shaw

“If you have a garden and a library, you have everything you need.”

Cicero

“Books are like mirrors: if a fool looks in, you cannot expect a genius to look out.”

J.K. Rowling

“I cannot remember the books I’ve read any more than the meals I have eaten; even so, they have made me.”

Ralph Waldo Emerson

“A book must be the axe for the frozen sea within us.”

Franz Kafka

“The best books… are those that tell you what you know already.”

George Orwell, “1984“

“My Best Friend is a person who will give me a book I have not read.”

Abraham Lincoln

“One glance at a book and you hear the voice of another person, perhaps someone dead for 1,000 years.

To read is to voyage through time.”

Carl Sagan

The list will always be updated…

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