Amazon.com: Customer Reviews: The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order

Top positive review

93 people found this helpful

Major implications not only for currencies, but for the management of all life's transactions. This you have to know

ByGraham H. Seiberton February 2, 2015

The authors of this book are reporters, and as a piece of reportage it is broad, deep, and well-balanced. They take you through the history of bitcoin, the alternatives to bitcoin, all the technology behind bitcoin, and extended uses for this disruptive technology which could have wide implications throughout society. They provide a broad discussion of the projects underway in 2014 to employ bitcoin.

If the book has one shortcoming, it does not define how it all works quite precisely enough for a techie. The reader of this review may find it useful to mix my point of view with that of the book itself in trying to envision the mechanics.

The casual reader is somewhat familiar with the bitcoin phenomenon. It appears to have been started by a single idiosyncratic individual calling himself Satoshi Nakamoto but whose identity remains unknown and who dropped out of sight some three years ago. What this gifted technician did was to envision the architecture of an entire system, implement that system, find a group of disciples, fanatics if you will, to carry it on, and then quietly disappear. This is truly the stuff of science fiction

The thing that he invented is the thing that is most difficult to describe. Here I go in my own words, rearranging some thoughts from these authors.

The first question is what a currency is. We are familiar with fiat currencies such as the dollar the euro and the yen. We are familiar with the fact that these have all evolved from metallic representations, such as silver dollars and $20 gold pieces, to paper certificates indicating that metal was once held in storage to back them up, to fiat currencies which have nothing whatsoever behind them. The dollar today is an artificial construction, a unit of exchange.

Actually, what every currency must be is three things. It must be a unit of exchange, something that can be offered in exchange for goods or services. It must also be a store of wealth, so that today's labor can be converted into currency and stored to be spent later. Or vice versa, it can be borrowed against future earnings. The third measure is a unit of account. Everybody has income stated in some currency or another. You may make $2,000 a month and have a net worth of 700,000 Francs. Businesses especially need such a measure of their performance.

That's what currencies are. They have different strengths and weaknesses. Gold his difficult to carry and safeguard and doesn't come in small denominations. Fiat currencies are imminently bankable, they can be moved around electronically with great ease. However, they are subject to counterfeiting and inflation. The counterfeiter can create false paper money, and a financial manipulator or central bank can arbitrarily dilute current holders, expanding the money supply by creating dollars out of thin air. Moreover, the rapacious bankers scrape off a slice of every transaction, from 3% on a typical credit card transaction to 10% and more on international remittances. No currency is ideal.

One characteristic that all traditional currencies have had is that they are fungible. If I have $1,000 in the bank, I could not possibly say who previously owned those dollars. It's a silly question even to ask, like asking what happened to a raindrop falling into the ocean. Even the tangible stuff like the pennies in my pockets carry no history with them.

I make an analogy that the authors do not: to real estate. Real property is recorded by a registrar. The fact that I own my house is known to the state and it is public information available to anybody. Not only that, but who I brought my house from, and who they bought from, is a matter of public record. How the land my house sits on was defined is public record. It was probably subdivided from some farm back in time. Thus, where land records are complete, there is a chain of ownership reflected in land records that guarantees the authenticity of a title.

This is the most essential difference between bitcoin and other currencies: a perpetual chain of ownership. There is a permanent record electronic record of every past owner of every particular coin or fraction thereof, and of every transaction ever completed within the system.

The implications of being able to trace the history of every transaction in which a piece of money has been involved are extremely broad. It means that there can be no question as to the validity of a transaction. Unlike with a bank, there cannot be an overdrawn account. If the money isn't there, the transaction is not accepted. If it is, the transaction is final. Unlike paper money you cannot have counterfeit. Unlike a Federal Reserve System you cannot have $85 billion created every month out of thin air. The whole bitcoin universe knows where every piece of money came from.

The bitcoin concept ,which is called the block chain concept is revolutionary in that sense. There is a publicly available record of every transaction ever done within the system going back to Nakamoto's genesis block.

Every account is identified only by a number, a large one at 25-36 alphameric characters. The accounts are anonymous and password protected. Lose the password and the money is gone. There is no bureaucracy to help you out. Password length is up to user discretion, but the longer the better.

It raises questions of control - who owns the system, and how is new money introduced, if it is at all. Lastly, and most importantly, it raises the technological question. How do you do that? The answer to the latter is called the block chain.

The block chain works by hashing technology. Let's take an example.

The letters in this paragraph can be interpreted as a number. A very large number, and very likely to be different from any other paragraph even in a large manuscript.

Here is a table of the ASCII (internal) representations of the letters in the above paragraph. If you add up the values of the individual letters you get 15,050, a fairly large number. But if, just for instance, you interpret each string of six letters as a (12 place hexadecimal) number, and add those up, the result is huge: 5,642,316,386,171,830. That's five quadrillion, larger than the national debt measured in pennies. The probability that it is unique is extremely high. There is almost no way I could fiddle with the text in the paragraph without throwing the hash total off. Rest assured that bitcoin uses bigger numbers and a more sophisticated scheme than I show here.

T 84 h 104 e 101 <sp> 32 l 108 e 101 t 116 t 116 e 101 r 114 s 115 <sp> 32 i 105 n 110 <sp> 32 t 116 h 104 i 105 s 115 <sp> 32 p 112 a 97 r 114 a 97 g 103 r 114 a 97 p 112 h 104 <sp> 32 c 99 a 97 n 110 <sp> 32 b 98 e 101 <sp> 32 i 105 n 110 t 116 e 101 r 114 p 112 r 114 e 101 t 116 e 101 d 100 <sp> 32 a 97 s 115 <sp> 32 a 97 <sp> 32 n 110 u 117 m 109 b 98 e 101 r 114 . 46 <sp> 32 <sp> 32 A 65 <sp> 32 v 118 e 101 r 114 y 121 <sp> 32 l 108 a 97 r 114 g 103 e 101 <sp> 32 n 110 u 117 m 109 b 98 e 101 r 114 , 44 <sp> 32 a 97 n 110 d 100 <sp> 32 v 118 e 101 r 114 y 121 <sp> 32 l 108 i 105 k 107 e 101 l 108 y 121 <sp> 32 t 116 o 111 <sp> 32 b 98 e 101 <sp> 32 d 100 i 105 f 102 f 102 e 101 r 114 e 101 n 110 t 116 <sp> 32 f 102 r 114 o 111 m 109 <sp> 32 a 97 n 110 y 121 <sp> 32 o 111 t 116 h 104 e 101 r 114 <sp> 32 p 112 a 97 r 114 a 97 g 103 r 114 a 97 p 112 h 104 <sp> 32 i 105 n 110 <sp> 32 a 97 <sp> 32 l 108 a 97 r 114 g 103 e 101 <sp> 32 m 109 a 97 n 110 u 117 s 115 c 99 r 114 i 105 p 112 t 116 . 46

The take-home point is that a large volume of text can be (very close to) uniquely vouched for by a fairly compact number. If I changed any letter in the paragraph the number would change, indicating that the paragraph had lost its integrity. This device is called a hash total. Bitcoin uses hash total schemes, though certainly much fancier than this one, throughout.

Every transaction document can thus be represented uniquely enough for bitcoin's purposes by some string of numbers. It takes a large number, but one which is very small in comparison to the original document for which it vouches.

Bitcoin is capable of processing about seven transactions per second. It batches them every ten minutes. Each batch would thus contain fewer than 7x60x10 = 4200 transactions. The 4200 hash totals would themselves be combined into a hash. Most importantly, this hash also includes the hash from the previous batch, which has in the intervening ten minutes been vetted by a "proof of work" concept, authenticated and accepted by the electronic voting process of the bitcoin community. These summary hashes, combined with the backwards links in the block chain, knit together every transaction in the history of the bitcoin universe.

A little arithmetic (mine, not the authors') demonstrates that the data volumes are well within the realm of modern computing. If documenting each transaction took 10kb, with 400 transactions/minute over five years, the total database would be 10 terabytes. That is not a frightening number. It is highly conceivable that many sites could keep the replicated copies of this data necessary for the integrity/voting process. The active data, the recent transactions and wallet/account balances, could be much smaller. Presumably, though it is not discussed, there is some kind of a tiered scheme, so as not to waste too much resource storing inactive data.

The block chain serves two functions it guarantees the integrity of the system and it makes it compact enough that there is a way to work with it. The people who need to see the original transactions can look at the particular block in which they occurred, but most users who are not affected by historical transactions only need to deal with blocks that involve their activity. However, the information is widely enough shared that its integrity is insured.

This hash total functioning, and in fact almost all of the operation, is highly encrypted using public key cryptography. For a good description, see Nine Algorithms That Changed the Future: The Ingenious Ideas That Drive Today's Computers.

The there is a concept of "bitcoin mining" which is fundamental to the process. The mining involves the hashing process. In my simplistic example I said that we will digitize the representation of six characters and interpret the group as a large number. But in fact bitcoin uses much more complex algorithms, and the algorithms involve a variable part, a very long and unique number which is derived by an excruciatingly difficult series of computations. That bitcoin mining process involves coming up with the next suitable number. It is so computing-power intensive that one of the concerns about bitcoin is the carbon footprint that the computers executing bitcoin hashing algorithms use. Read the book to understand the difficulty. In any case understand that it is highly encrypted and robust against fraud. What fraud has occurred in bitcoin is due to human error rather than any architectural flaws.

Going back to the book the authors do a good job of reporting the early days of bitcoin and then surveying how it is used today. It is still a minor player in the financial transactions field. They observe that bitcoin can only handle 7 transactions per second versus the 10,000 or so that Visa is structured to manage. It is several orders of magnitude different. In order for bitcoin to emerge as a competitor with the big financial houses, its architecture may need to be rethought.

Bitcoin has been too unstable to serve as a store of wealth that allows one to sleep well at night. Its value rocketed from pennies up to over $1,000 and back down to the low hundreds. Presumably as it becomes more accepted the currency will achieve more stability.

Many people are concerned that a bitcoin itself has a no substance. There is no inherent value in this bunch of bits. The counterargument is that this is equally true of fiat currencies, and bitcoin has the benefit of scarcity. The original architecture of bitcoin calls for the introduction of new bitcoins as reward to the miners who come up with the new block total hashing numbers. As they become harder and harder to generate, it has resulted in the massive computer power and carbon footprint mentioned above. But the number of bitcoins to be eventually generated was specified at the very beginning and is strictly limited. So inflation is not going to be a problem with bitcoin. In fact, deflation is much more likely to occur. As the value of the coins goes up, the cost of things in bitcoins will go down.

Deflation works against governments, which depend on inflation to progressively hike people's tax brackets and things like that. How governments deal with bitcoin is an interesting question into which the authors delve at length. Bitcoin is difficult to control difficult to tax difficult to understand and difficult to define legally. The authors do a good job of examining all of these aspects.

The authors display a liberal bent. The thing that gets them most excited is that bitcoin may be a way to bring banking to that majority of mankind who do not currently have bank accounts. Such people are simply not worth the effort for banks to serve. Bitcoin transactions can be executed over telephones, not even smart phones. The authors look for entrepreneurs to make it work in the less-developed corners of the world. This sounds a bit idealistic, but one must recognize how idealistic it seemed only two decades ago to bring cell phone service to the same people. Now it is ubiquitous.

Blockchain technology could be used to track other kinds of titles. Land records are subject to fraud in many parts of the world. Bribe the right judge and he will change the paper land records, depriving you of a property right. A blockchain approach to land records would make it impossible. It could also make bribery more visible. Conversely, as has already been seen, the anonymity of bitcoin is a boon for drug dealers and money launderers.

Bitcoin is truly a transnational, borderless system. The authors talk about its attraction in a place like Argentina that has not had a reliable currency since Juan Peron in the 1950s. The currencies in many other parts of the world are under pressure right now. I have seen the value of my currency, the hryvnya, fall by 60% over the last year. Bitcoin could be a store of value. More important, it can serve as a medium of exchange among countries where the currencies are not functioning and are not easily exchangeable. The banks are controlled by governments, whereas bitcoin is out on its own. Therefore when the governments decree that you cannot change pesos or rubles or whatever the fiat currency is into something more attractive, bitcoin seems to offer an alternative. It would simply bypass the system. Governments are working hard to control it, and there is a question of how effective they will be in doing so given that anybody with a computer has the ability to work with bitcoin. The problem seems to be in the exchanges, going back and forth between bitcoin and fiat currencies.

This a long review. Let me close in saying that this book will give you an insight into the modern financial system and a good appreciation of bitcoin, which may represent the most serious intellectual challenge to the structure of finance, both national and international, to arise within the past couple of centuries. It is absolutely worth reading.

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One person found this helpful

Book is interesting but I was hoping for something more ...

ByMr. David John Dohertyon February 24, 2016

Book is interesting but I was hoping for something more in depth about the mechanics of the currency. Spends a large portion of the book talking about what 'might' happen with bitcoin which I found a bit repetitive.

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Showing 1-10 of 65 reviews(Verified Purchases). See all 89 reviews

Describes how bitcoin and blockchain work

BySkubalon12on November 20, 2016

Format: PaperbackVerified Purchase

This book is a good introduction to bitcoin. I really didn't know too much about the cryptocurrency and I turned to this based on recommendations that it explained the technology behind bitcoin (blockchain) fairly understandably and handled some of the main economic questions. Overall I found it was a pleasing read at most parts and had its share of pluses and minuses.

On the positive side, the book focuses an entire chapter (5) on how the blockchain works and I think the authors did a good job simplifying and explaining this rather complex topic. Understanding the blockchain technology is really best suited to people with a computer science or cryptography background, so having an intermediate text like this is great. Another positive is the extensive history of the start of bitcoin and the early days of progress made to get it used in everyday transactions. It is a very thorough account of many of the startups that have come out of bitcoin and I think that the book offers a great summary to get up to speed.

It is also the extensive account of the startups that I didn't like as much. There's a lot and it really jumps around. This discussion really slows down the pace and excitement of learning about this technology, something the earliest chapters focused on. I was hoping for more discussion on the economics of bitcoin, such as how it would handle the complex needs of managing market gyrations, something central banks do around the world to help prevent severe recessions.

While reading you quickly begin to see that the dream of bitcoin "replacing" today's currencies is little unrealistic, especially in the decentralized fashion hoped for by its early adopters and promoters. The authors implicitly say as much many times over. The challenges facing the currency though may be overshadowed by the adoption of the underlying technology (blockchain) by all sorts of applications. There's no doubt though that this path is complex. I look forward to reading the book that portrays that history one day. For now, this is a good intro and a history of the young, new technology and I would recommend it for anyone seeking both a description of events and an explanation of how it all works.

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Job well done. Blockchain is clear at last to me.

ByD. Hill Jr.on January 30, 2016

Format: Kindle EditionVerified Purchase

I rarely write book reviews but felt compelled to say job well done on this one. Both authors certainly did their homework and uncovered hundreds of interesting facts I never realized about the formation and traction fueling bitcoin and related blockchain technologies. Its a fun read and somehow personalized by narrative around different key characters in the blockchain drama. I get the feeling we'll be hearing a lot about blockchain in the years to come and am hopeful it can unlock banking to the unbanked of the world and do away with some archaic industries such as escrow, title companies and better still, less corruption of government. There are of course many details to be worked out with blockchain as the authors point out, but I left the book feeling hopeful that so much innovation is happening so quickly that there is surely to be many enlightened victories (and not just people using blockchain tech for illegal activity).

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Best bitcoin book I've read so far

ByFlooredon January 28, 2015

Format: HardcoverVerified Purchase

There are two steps you need to go through in order to understand cryptocurrency.

The first thing you have to do is ask yourself a series of questions "what is money?" "What is value?" "What is a payment?" "How does our payment system work?" "How does our money work?" "How does Bitcoin work?" "How well does Bitcoin conform to how we understand money/payments/assets/value as working?" "What are crypto-currency's strengths/weaknesses? And how do these strengths/weaknesses compare to the system we are using now?"

It is only once you have taken the time to thoroughly examine these questions that you can move on to the second step and begin to look at the second half of the equation and start talking to the people involved. Here you ask the Bitcoin Fanboys why they like it. You ask the doubters and trolls why they hate it. You ask the critics what they would change. You ask the intellectuals what they are impressed with or what they have doubts about. And all the while you must ask yourself "how objective is the person I am talking to?"

Jeffery Robinson's book Bitcon was deeply flawed because he basically skipped over the first part. He created a narrative of opinions without ever asking how objective those viewpoints were. And while he quite correctly divided the crypto currency space up into true believer and doubter, he failed to recognize that those doubters tend to be every bit as fanatical, unbalanced, and uninformed (on the subject) as the cult-like faithful.

Vigna & Casey do not fall into this trap. "The age of cryptocurrency" is intelligent, thought provoking, and well researched. This book provides an easy context to understanding this very important technology. Reading this will make you begin to appreciate why many people believe this protocol may change the world of finance in a way similar to how the internet changed communications.

The only complaint I have is that sometimes I think they have fallen a little too much under Bitcoin's spell. While they do bring up problems, talk about the scams, thefts, and libertarian/anacho-capitalist fanaticism that a lot of us find so ugly about the space, I'm not entirely sure they spent enough time on these problems. As an example they spend time examining how Bitcoin might help the unbanked without really stressing how the crazy volatility is a serious detriment to this.

But I'm nitpicking. If you read this with an open mind you will finish the book informed (even if you still have legitimate doubts). If you come to it with a bias firmly closing your mind (either for or against) then I'm sure you can find something in this book that will let you keep your mind safely closed.

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Very good introduction of Blockchain and Bitcoin

ByNPSon April 27, 2017

Format: HardcoverVerified Purchase

Very well written and researched book. The author found a good balance between monetary concepts and the technical aspects of the new currency. I started by knowing very little about Blockchain and can claim that I am better informed.

There is a good progression in the book building on concepts explained previously, For a technical book, this can be quite challenging. The author has a humorous side as well when he describes the colorful characters of this new frontier.

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Cryptocurrencies and the Brave New World

ByBhagwan Chowdhryon April 28, 2015

Format: Kindle EditionVerified Purchase

I have been reading and researching Bitcoin, Digital Payments, Smart Contracts for some time now. There is a lot of material on the web. For technical details a MOOC on Bitcoin by Princeton professors is fantastic. But to learn about the history, the current state and future of Bitcoin and other Cryptocurrencies, the Blockchain technology, Digital payments and Smart Contracts and to put it all in a broad perspective, this book by Paul Vigna and Mike Casey is excellent. It is also a very interesting read with stories about people and personalities involved in this movement. This was a perfect book to begin my sabbatical leave.

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Excellent Bitcoin Introduction

ByJohn S.on February 4, 2015

Format: HardcoverVerified Purchase

Excellent, informative, and balanced. As an experienced Bitcoin user, it was a great read/refresher - but it would also serve as an excellent introduction for anybody wanting to sift through the junk out there in the main stream media to really get to the (accurate) point about Bitcoin. The book eloquently lays out the promise seen in Bitcoin and also the obstacles that have to be overcome for it to reach its full potential. 5 stars.

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Fascinating read!

ByGayleon April 13, 2016

Format: PaperbackVerified Purchase

The combination of historical background information coupled with the contemporary state of the blockchain and bitcoin world is incredible. I loved this book! It's extremely well researched and written in a way most anyone can understand. Hard to believe we won't all be using some form of digital currency on a blockchain system in the near future - opportunities abound!

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Really loved this book

ByAmazon Customeron February 8, 2017

Format: PaperbackVerified Purchase

Really loved this book. I'm familiar with blockchain technology but I learned a lot about the world of (non-crypto) currencies as well as the economic environment in which crypto currencies live. I also like the fluid writing style of the authors. If you need to know more about crypto currencies and how they relate to the world economic system, this book is for you.

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Great summary of key facets and concerns

ByF. Rothon September 12, 2016

Format: Kindle EditionVerified Purchase

The authors have created a very valuable treatment of block chain and Bitcoin technology. I have had much experience in computing technologies over the last few decades, and I've learned to recognize important innovations as well as to appreciate lucid timely tutorials. This book is a great exemplar of that kind of important work. I recommend it without reservation.

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Recommended

ByAdrian Brendon October 5, 2016

Format: Kindle EditionVerified Purchase

Every aspect of bitcoin and other currencies and the blockchain advantages covered so thoroughly! Plus all the history surrounding the creators and miners and then all the improvements made by legions of devoted coders. And plenty of banking history as well. He writes well and tells a really thrilling story.

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