You're looking at all the posts published under the tag Money.
/ Bretton Woods

With Money, Change is Certain

With Money, Change is Certain

The last time money changed, it happened with a whimper, then a bang. In the twilight of the Second World War, 44 nations sent delegates to Bretton Woods to build a global economic system that could avoid depression, indemnity, and hyperinflation. After a month, they had built the World Bank Group, as well as what they hoped was a stable global financial system. And it worked: for 26 years, the world had a near absence of banking crises.

But Bretton Woods had a fatal flaw.

One of the system’s core features was the dollar’s use as a reserve currency, which created for it two contradictory uses: one as liquidity within the United States economy, the other as an asset held by foreign nations. The first use required low inflation and a stable price while the second needed more appreciation to maintain value. These tensions, made of contradictory policy promises, pulled the dollar in irreconcilable directions. Rather than wait for the snap, Richard Nixon announced in 1971 that the United States Dollar would no longer be indexed to gold, ending the Bretton Woods system and moving the modern world into an era of pure fiat currency. It also triggered a decade of stagflation.

Today, Bitcoin too faces Triffin’s Dilemma. While proposed as a peer-to-peer digital cash system, the first cryptocurrency has found more lasting traffic as an extremely unstable asset, less liquid than its creators would have liked but more fitting to its profile as “digital gold.” Those long-term holders would prefer that Bitcoin continue to appreciate so they can make returns on their investment. Many early adopters would instead prefer that Bitcoin stabilize in order to facilitate mass adoption in commerce. Bitcoin, caught between these two extremes, by design lacks either a board of governors to force a resolution or an internal design that can resolve the issues of dual use.

But Ampleforth has a solution to this dilemma. With these pressures in mind, we’ve created a cryptocurrency both decoupled from Bitcoin’s fluctuations and immune to the pitfalls of a fully deflationary currency. To do that, we’re building on George Selgin’s proposal of “synthetic commodity money,” an asset with a real cost of production that can still be adjusted in response to economic forces. In short: cryptocurrency. To overcome the limits of old money, we’re making something new, with a unique structure and movement pattern that makes it not only different than bitcoin, but potentially uncorrelated as well.

It took great minds to solve the currency shocks and crises of the past century, and now we are putting their Nobel-winning theories to work by creating Amples (AMPL). To learn more, please check out our Red Book, where we outline the economic principles guiding our design. Now, as before, money is set to change. Satoshi Nakamoto took the first great step in 2009. At Ampleforth, we’re ready to make the next leap.

/ FA Hayek

Great Economists: Friedrich August Hayek

Great Economists: Friedrich August Hayek

Friedrich August Hayek has been hailed as one of the preeminent economists from the latter half of the twentieth century. His work on monetary theory and the interdependence of economic, social, and institutional phenomena won him a Nobel Prize in 1974, and his writings from the early twentieth century is still read heavily by graduate economic students today.

FA Hayek

Besides his Nobel Prize work on monetary theory and interdependence, Hayek was one of the pioneers and strongest advocates for the Austrian school of economics, along with Gottfried Haberler and Fritz Machlup. Furthermore, after becoming the director of the Austrian Institute of Business cycle research, Hayek became a professor at the London School of Economics.

Beginning in the 1920s, and progressing through the 1940s, Hayek’s work on business cycles, capital theory, and monetary theory as well as the connection between the three brought him international acclaim. According to Hayek, markets evolve due to people- that is to say, markets were never planned, they came to be due to the actions of people involved in the markets. His theories on business cycles caused him to become well acquainted with the work of John Meynard Keynes.

The two battled over the differences in their economic theories, with Keynes an obvious proponent of Keynesian policies, while Hayek believed Keynes’s policies to combat unemployment would inevitably lead to unemployment.

Following his work on business cycles, Hayek turned to the study of social planning, concluding it could not work, as data is necessary to create a functioning market, but it is the markets themselves that generate data. If there were no markets, there would be no data. Hayek turned to combat the growing socialist sentiment in Britain following WW2, in his book The Road to Serfdom (Which you can read for free here, provided by the Mises Institute). It was then one of his strongest opponents, Keynes, who gave him the most praise for his anti-socialism work.

Following his Nobel Prize win in 1974, Hayek became more radical, and began to advocate for the denationalization of money, as an early proponent for the idea behind digital assets. Hayek argued privatized enterprises distributing currency would incentivize them to keep up their purchasing power, as users could choose between different currencies. Hayek pioneered the ideas behind the denationalization of currencies, and his theories can be seen in use today across digital assets.

You can watch his take on the denationalization of money here:

/ Economics

Great Economists: Milton Friedman

Great Economists: Milton Friedman

Milton Friedman was called "the most influential economist of the second half of the 20th century ... possibly of all of it" by The Economist. This is for very good reasons, as he challenged many of the policies that our nation held dear and made us question exactly what we were doing. Often times he would hold public seminars and challenged people’s beliefs. He had a knack for breaking things down to their simplest elements so that everyone could understand. His ability to be understood by people from all walks of life made him loved, respected and admired by many.

Among Milton Friedman’s many accomplishments he was awarded a Nobel Prize in Economics for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy. Friedman also helped shape the future of the nation by mentoring renowned economists such as Gary Becker, Robert Fogel, Thomas Sowell and Robert Lucas Jr. Friedman taught at the University of Chicago where he was able to educate and shape the lives of thousands of students.

Milton often promoted an alternative macroeconomic viewpoint known as "monetarism" and argued that a steady, small expansion of the money supply was the preferred policy. As a result of his works on monetary policy, taxation, privatization, and deregulation the 1980’s saw an economic boom. During that time Friedman was advising global policy makers Ronald Reagan and Margaret Thatcher. Friedman’s positive influence didn’t end in the 1980’s. Immediately following the global financial crisis in 2008 the Federal Reserve was influenced by his monetary theory to achieve recovery.

Over his lifetime Friedman wrote many books, papers, and columns. He also appeared in many lectures across the country and open debates. Perhaps most of all, Milton is remembered for his engaging televised lectures where he advocated for responsible monetary policy. Those lectures and television broadcasts still live on today, as you can see in this video where Milton Friedman discusses inflation (click image above to view video).

Time tested and proven principles such as those discussed by great economists such as Milton Friedman are what shaped our technology at Ampleforth. For more detail on the Ampleforth protocol please check out our website and whitepaper, and stay up to date by following our Twitter!

/ FA Hayek

Friedrich August Hayek Predicting Bitcoin and Cryptocurrencies

Friedrich August Hayek Predicting Bitcoin and Cryptocurrencies

For those of you who are not familiar with Friedrich Hayek we think this is a great video to introduce you to him. FA Hayek was an economist and philosopher who had the honor of sharing the 1974 Nobel Prize in Economics with Gunnar Myrdal. The duo were awarded the Nobel Prize for their work in the theory of money. Hayek had some truly ground breaking ideas that set the stage for our current day digital asset ecosystem.

In this video FA Hayek discusses that law, language and money, the three paradigms of spontaneous government institutions have had very different life cycles. While law and language were allowed to develop from their initial forms into their current states, money was halted and frozen in its most primitive, original form. Money was initially formed as physical coins, a form of money that we still use  today. At the time of this recording, Bitcoin and cryptocurrencies did not exist. Hayek goes on to predict the way in which he felt money would need to be experimented with in order to develop. That prediction turned out to be incredibly accurate, from the idea of creating and "opening accounts in something" to the "sly, roundabout way" Bitcoin was able to be introduced to the world in a way that can not be stopped.

Great economists like FA Hayek provided the time tested concepts that underpin the work we're doing at Ampleforth. To dig deeper into our protocol please consider checking out our website and whitepaper. Stay up to date by following our Twitter or joining our Telegram!