Forward of The Bitcoin Standard is written by Michael Saylor:
Michael Saylor owns the company Microstrategy and this company is the first and largest bitcoin treasury company which means instead of holding cash on the balance sheet this company holds bitcoin. Microstrategy issues shares to aggressively accumulate bitcoin. He is the first to HODL bitcoin. (HODL=Hold On For Dear Life).
Microstrategy (MSTR: on NADQ) as of July 8, 2025 owns 597,325 bitcoin (BTC) worth approximately $70.32 Billion (cost base of approximately $66,000 per bitcoin). Microstrategy was and is the first pioneer company to adopt bitcoin accumulation and many other companies, now realize that bitcoin is a hard asset (good store of value and set supply of only ever 21 million) are following suit and accumulating bitcoin, also. Many realize that initially individuals bought bitcoin, now the accumulation is happening with corporate treasuries and finally the race will be on for nation states (like China and the U.S, Canada etc) to accumulate Bitcoin.
Incidentally Michael Saylor has started a free university offering credits and certificates in many subjects.
Saylor Academy Mission
Saylor Academy® is a nonprofit initiative working since 2008 to offer free and open online courses to all who want to learn. We offer 150+ full-length courses at the college and professional levels, each built by subject matter experts. All courses are available to complete — at your pace, on your schedule, and free of cost.
Here is the link to it: https://www.saylor.org
Now here is the summary from the book by Michael Saylor Foreward:
Michaeil Saylor writes that at the time that he read the book The Bitcoin Standard, his company Microstrategy, had 50 million dollars of cash assets just sitting on the balance sheet. He questioned, “How does and modern corporation protect it’s balance sheet in an environment of monetary inflation where the currency is losing 15 percent of it’s purchasing power each year?” He went looking for solutions like bonds, real estate, art metals and he found Bitcoin as the solution to protect his money from debasement. He found The Bitcoin Standard book to be a good account of what constitutes money and a store of value and this book helped him see the sound argument Bitcoin’s role as both a store of value and money.
Chapter One Overview: MONEY
PG. 3 CARL MENGER- Austrian father of economics said the key property that leads to a good being adopted freely is salability.
1. Salability:
Salability is the ease with which a good can be sold on the market whenever it’s holder desires with the least loss in it’s price.
Salability across space and time:
-can be divined into smaller pieces per unit
-can be easily trasproed across space (weight) and will hold value into the future
-a good store of value is immune to deteriortation For Example: Fish rot and therefore loose value.
2. Hardness of Money
Hardness of money is the relative difficulty of producing new monetary units.
Stock: is the existing supply
Flow: the extra production that will be made in the next time period
The higher the ratio of stock to flow then the more hard (sound) the money is. The stock to flow helps in understanding the value proposition of bitcoin. (Hard to mine and programmed to only will ever be 21 million).
*If the supply can be easily increased this will destroy the wealth of those who hold it as a store of value. Anything that assumes the role of money should be costly to produce otherwise it is too tempting for “easy money” to be made which destroys store of value.
Examples that worked due to scarcity:
Seashells used to be hard to find and were rare in parts of the world and were used for trade until travel became easier.
Cigarettes in prison are hard to find and scarce.
The author says that the hardest and most saleable forms of money will always win.
3. The third function of money is unit of account:
Unit of account is the medium of exchange that reflects the scarcity of goods.
CHAPTER 2 SUMMARY PRIMATIVE MONEY
RAI STONE-used on Yap Island (most like Bitcoin). These stones were carved from limestone and functioned as money
-various sizes-hole in the middle-weighted up to 4 tonnes-not native to Yap Island
Rai stones were brought from Palau of Guam and the beauty and rarity of the stones made them desireable.
Some rocks needed thousands of people to transport them and were very hard to get
The stones were placed for all to see-then the owner would announce new ownership when making payment.
Everyone knew who the owner was therefore, there was no theft.
The stones had saleability across space because anyone could use them as payment on Yap Island
Different sizes provided some degree of salability and the stones held value over time
Rai stones had a high stock to flow ratio since it was hard to get more supply (flow) and the amount in circulation (stock) was limited.
Demise of Ria stones was the invention of and use of dynamite (pg.13)
Dynamite made the mining and availability of Rai stones easier. Suddenly, the flow (supply) of the stones increased and the stones moved easily to Yap Island; no longer required hundreds of people to transport the stones (the mining difficulties went from hard to easy). Essentially, it became easy to make more and instead of being “hard” money the stones became “easy” money and lost value.
Author’s point:
The demise of stock to flow has been the reason that every form of money has ever lost its monetary role.
AGGRY BEADS
Angry beads of Western Africa
-precious stones (possibly Meteorite)
-high stock to flow (hard to get)
-small and valuable-saleable across space (easy to transport)
-no uniform units
However, eventually Europeans traded with Africa and eroded their purchasing power
SEASHELLS
North America-Africa-Asia
Wampum Shells-hard to find and had a high stock to flow ratio
Like the Aggry beads they did not have uniform units therefore prices were not easily measured
In 1663, Seashell were legal tender
However, British gold and silver coins started flowing and allowed for a better uniformity and increased salably across space
Seashells stopped being legal tender and lost all monetary role (a harder form of money came along with metal coins).
SALT AND CATTLE
Salt and Cattle were the most prized possessions anyone could own. However, they were bulky and not divisible.
So along side cattle was SALT>which was easy to keep over time and divisable.
Even today the word SALARY comes from Salt: SAL is the Latin word for salt.
Technologies effect on money: with the utilization of hydrocarbon fuel energy this allowed for production capacity which allowed for new supply (flow). Therefore, the stock to flow ratio was lost.
Examples:
The Rai stones could now be easily mined due to dynamite technology.
Seashells collected en masse by large boats with motors lost their hardness and scarcity.
Author’s point:
Money that is easy to produce is no money at all.
CHAPTER 3: MONETARY METALS
Metals density made movement easier than salt or cattle therefore, metals had better salability across space.
The production of metals was not easy so they had salability across time (held value).
Durability: some metals are more valuable than others due to their availability on earth.
Iron/copper: low value: there is lots and subject to corrosion.
Silver/Gold: more rare and more durable.
Gold’s virtual indestructibility allowed humans to store value across generations.
Initially, metals were bought and sold by weight but metallurgy advanced and uniform coins with exact metal contents were minted.
Now metal coins had more saleable and were easiliy accepted since they didn’t have to be weighed for every transaction.
3 Most Used:
Gold, Silver, Copper; All used for around 2500 years!
Two major drawbacks to metal coin use:
1. Ebbs of supply and demand- Silver had and increase in production and therefore, a drop in demand.
2. Governments and counterfeits could reduce the metal content inside the coins.
By the 19th century with the development of banking, along came paper money BACKED by GOLD in the treasuries of central banks.
This evolution was called THE GOLD STANDARD.
WHY GOLD?
Market Demand vs. Monetary Demand
If you choose a good as a store of value you effectively increase the demand for it beyond regular market demand which will cause it’s price to rise.
For anything to be a good store of value, it’s producers have to be constrained from inflating it’s supply enough to bring price down -such an asses would reward holders of it in the long run.
So far, the winner as a store of wealth throughout history has been gold. Gold maintains its monetary role due to two unique physical characteristics:
1. Chemically stable: Virtually impossible to destroy (change from sold to metal-but not destroy)
2. Rare: Gold is impossible (at least it was at time of book writing) to synthesize from anything else and can only be extracted from unrefined ore, rare on our planet (pg.21)
| (Interesting Aside) Very Recent Synthetic Gold Development! https://www.binance.com/en/square/post/31624159743425# This article dated on October 28, 2025, on Binance website, explains that China has claimed to have created synthetic gold! A lab- engineered material identical to natural gold in look, weight and conductivity. Through advanced atomic engineering at the nanoscale, scientists have achieved what once seemed impossible- real gold without mining. This lab grown version mirrors natural gold in every property while being clean, scalable and eco-friendly-potentially disrupting the luxury, technology and financial sectors. Unlike traditional gold extraction- expensive and environmentally damaging-synthetic gold offers a sustainable alternative…. Click the link for further details about this interesting development. Advancing Technologies… I have included this GOLD discovery because the discovery of synthetic gold ties into the author’s earlier statement involving the effect that new, emerging technologies can have on scarcity and therefore, store of value of money. If Gold’s scarcity is challenged…What happens now to gold as a store of value or money? More: https://thedailyeconomy.org/article/physics-meets-finance-theoretical-consequences-of-man-made-gold/ |
Now Back to the book:
Author’s Point: Gold had the best stock to flow ratio and that is why is was used for THE GOLD STANDARD:
The chemical stability of gold implies virtually all the gold ever mined by humans is still more or less owned and the only way to get more gold is to mine it which is an expensive process. Essentially, the existing stockpile of gold around the world is the product of thousands of years of gold production which is magnitudes larger than new production. The growth rate of gold production is about 1.5 percent of existing supply (pg.22) Therefore, gold offers a good store of value and price stability with a resulting high stock to flow ratio. (This stock to flow ratio parallels bitcoin, which also has a high stock to flow ratio.)
DEBASEMENT AND SOUND MONEY
The Denari: The silver coin of the Roman Republic with 3.9 g of silver created by Julius Caesar.
The Aureus Coin_8 g of gold.
These coins provided 75 years of economic stability until Nero ruled and allowed “coin clipping”
Coin clipping was a process where coins were collected from the population and reminded with less gold or silver content.
The result was an increase in the money supply which allowed for government overspending and inflation (pg.27)
Author’s Point:
Sound money (free from debasement) like money clipping, is needed for human flourishing, without which society stands on the precipice of barbarism and destruction.
Pg. 31 Two technical advancements that led the world away from physical coins
1. The telegraph
2. Train networks
These two advancements allowed banks to communicate and send payment physically and allowed the use of checks and paper receipts instead of gold or silver. Many nations switch to monetary standard of paper which was backed by coins for ease of transport.
1717 Issac Newton (physicist) was the warden of the Royal Mint of Britain and he had Britain adopt a gold standard in 1717 under his direction. This adoption advanced Britain’s trade world wide (pg.31). People could now store gold in banks and use paper which was easier to carry to pay for goods. This solved gold’s salability across space problem.
India kept their currency (the Rupee) backed by sliver until 1898 and lost 56 percent of its value by not adopting a gold backed Rupee sooner. China also stayed on the silver standard until 1935 (!) and lost 78 percent of its value. It is the authors opinion that these countries inability to catch up tp the West in the 20th century is linking to this destruction of wealth by their failure to adopt the “more sound” and “harder” currency sooner.
Pg. 33 The author says, “anyone who thinks the refusal of bitcoin doesn’t mean he doesn’t have to deal with it, should keep these historical lessons in mind of others holding a money that is harder than yours….”
With gold in the hands of centralized banks, gold gained salability across time, but it lost its property if actual cash money and became subject to central authorities.
In order to solve its saleability problem (too heavy to carry-therefore, paper backed) gold became CENTRALIZED.
By becoming CENTRALIZED- gold lost its individual sovereignity (people don’t hold it) and it lost its resistance to government control.
Enter Bitcoin:
Bitcoin is designed to avoid centralized control.
The 19th century (particularly the second half) was so good because of gold. It was the greatest period for human flourishing. The majority of the planet used the same GOLD STANDARD. It was possible to circumnavigate the globe and use the same currency everywhere. In the U.S.A this ear was called the Gilded Age.
The majority of the world was on one sound monetary unit and in this period there was capital accumulation, good global trade and transformation of living standards worldwide.
Economies and societies were free. The gold standard was an international standard required by international trade and was the International money.
However, in 1914; the outbreak of World War 1, saw many of the world’s major economies suspend the convertibility of their currencies into gold. (Switzerland and Sweden stayed neutral and stayed on the Gold Standard until 1930’s).
Diagram Showing how transactions are verified on the Bitcoin ledger.
STEPS
1. Wallet
A user stores their Bitcoin in a digital wallet, which holds the private keys needed to authorize spending. The wallet does not hold physical coins, but access to Bitcoin recorded on the blockchain.
2. Transaction
When the user sends Bitcoin, the wallet creates a transaction showing the sender, receiver, and amount. This transaction is digitally signed to prove it is legitimate.
3. Broadcast
The signed transaction is broadcast to the Bitcoin network. It is shared with thousands of computers (nodes) around the world.
4. Pending Transactions (Mempool)
The transaction enters a waiting area called the memepool, where unconfirmed transactions are temporarily stored until they are verified.
5. Miners / Validators
Miners collect pending transactions and check that they are valid (no double-spending, correct signatures, sufficient balance).
6. Proof of Work / Mining Puzzle
Miners compete to solve a complex mathematical puzzle using computing power. The first miner to solve it earns the right to add the next block.
7. Block
Verified transactions are grouped together into a block. The block includes a cryptographic link to the previous block, forming a secure chain.
8. Confirmations
Once the block is added, the transaction receives its first confirmation. Each new block added afterward increases the number of confirmations, making the transaction more secure.
9. Ledger (Blockchain)
The updated block is permanently recorded on the public blockchain ledger. Every node updates its copy, ensuring transparency, accuracy, and security.