The Anatomy of a Money-like Informational Commodity: A Study of Bitcoin Kindle Edition

Swanson offers, as usual, an excellent and complete treatment of the subject to date. A timely and current review of the cryptocurrency ecosystem that extends well beyond the money exchange value and well into the economics of innovation. Very well informed and researched.

Good compilation of sources and references but poorly written and edited

A tour de force. The best book by far on Bitcoin. It is, for all practical purposes the only book you must read if you are interested in Bitcoin. Tim does masterful job covering a subject that few are capable of covering in this kind of depth and breadth. I don't think there is anyone else in the world capable of it right now. The content and thoroughness dealing with a complex subject goes a long way toward compensating for the book's flaws.

Flaws - 1.) The book is repetitive. If he had more time he could have improved it. So the book is somewhat on the green side. Given his audience in the bitcoin community, he has no alternative to hammering his points so thoroughly that there is little arguing with them though. 2.) Organization could be improved. 3.) A few places he expressed A=>B implies B=>A, when it wasn't necessarily so. But that didn't really matter, as the overall point was solid. I'll leave that as an exercise for the reader. 4.) Missing a good index. But, it's an ebook, so you can search it.

Strengths:
1.) Tim really knows his stuff. His experience working on the nitty-gritty of Bitcoin shows.
2.) I didn't find any weaseling, and he nails the issues. This guy has integrity and he's scrupulously honest, letting the chips fall where they may.

Highlights:

- Bitcoin is inefficient and expensive compared to other money transfer systems.
- Extraordinary amounts of fiat money have gone into Bitcoin with almost nothing to show for it in economic activity. The amount of electrical power that has been expended is astonishing, as is the electrical energy used each year.
- The environmental impact of Bitcoin is not good. Tim didn't do this, but extrapolating on the amount of energy required to run the current network, expansion would outstrip world energy resources. This is a direct outcome of the distributed design, which is inherently inefficient. Not only does that make expansion implausible, but the environmental cost is enough to make sensible people shut it down.
- The reward system of Bitcoin makes it very unlikely to remain viable. The way alternative coins have risen and fallen is directly in line with their reward cycle. As rewards drop, the "money-like commodity" can't deflate enough (e.g. increase in value) and miners no longer can afford to operate. Since miners provide security, when they can't operate profitably -- well, it's a problem.
- Miner's motivations are different than the motives of the health of the Bitcoin system. Consequently, little software upgrade happens. It is a curious side effect of open-source that it is, in practice, less flexible than closed-source in this arena.
- Bitcoin's expansion by deflation idea is fundamentally flawed.
- Bitcoin cannot do banking, so you can't do loans and you can't have interest. That means Bitcoin isn't money in the modern sense -- period.

There's more. Some real gems in this book.

While he's done his research, one should also note that Tim Swanson is currently Director of Market Research at R3CEV. This may have led to some degree of bias in the book, as it appears to be very anti-bitcoin/open blockchain. The R3 is a consortium of banks that would like to use private or "permissioned" blockchains to cut down on costs to their back end. While this will indeed make them more efficient in ways, they are effectively getting rid of all of the innovations that truly make the blockchain innovative. Without the open, decentralized and permission-less aspects of blockchain technology, you are essentially running a distributed database... and those have been around for years.

Tim is one of the very best and most original thinkers when it comes to bitcoin. He will open your eyes.