Warning: session_start(): open(/var/lib/php/session/sess_55mqaecp57m0vsl7krh2trdk4q, O_RDWR) failed: No space left on device (28) in /var/www/html/includes/config.php on line 34

Warning: session_start(): Failed to read session data: files (path: /var/lib/php/session) in /var/www/html/includes/config.php on line 34
addabook - The Age of Cryptocurrency
addabook home timeline gallery
signup or login
The Age of Cryptocurrency
How Bitcoin and the Blockchain Are Challenging the Global Economic Order
Paul Vigna
read on August 8, 2017

Going into this book I really didn't know anything at all about bitcoin. I understood it vaguely to be some kind of fad whose value had risen a lot recently, but not based on any strong fundamentals. I wrote it off as a bubble, and have ignored it for the last five or so years. Even at work, where it has potentially significant and long term disruptive potential, I've never really dug in - so I'm pretty late to the game on this.

The key takeaway has been better understanding of what the blockchain is. It is, essentially, an immutable, transparent accounting history of every historical bitcoin transaction. Anyone can inspect it, and no centralized source controls it. When bitcoin "miners" are mining for coins, the computations they're doing are transaction processing for pending bitcoin transfers - they are working to organize and validate a block of transactions. When done, that block is appended to the chain permanently.

The blockchain is what allows bitcoin to be entirely decentralized. There is no, and can be no, central bitcoin monetary authority.

The advantages of bitcoin, (and potentially other digital ccys) are significant. There is no clearing network. Bitcoin transaction clearing is nearly instantaneous and nearly costless (for now, but will increase over time). The elimination of so much economic friction could be a massive disruption. 

A few bullet points on risks:

  • Security. Once bitcoin is spent, its spent. no chargebacks, debits, etc.
  • If someone gets your private key, they can steal your coins. (requires hack, often physical). If you store BTC on a public exchange, then if that gets hacked your BTC could be lost.
  • 51% miner concentration risk; if a single party owns the majority of the mining computational power, they can purposefully create a hard fork, and conspire to double spend bitcoin. There are internal incentives against this, but it remains a core flaw of the system. Mining pools have come very close to this concentration amount.

This is the best video overview I've found of Bitcoin so far. Overall a pretty good book that has gotten me hooked on the subject.

Author Bio:

Paul Vigna is a markets reporter for The Wall Street Journal, covering equities and the economy. He is a columnist and anchor for MoneyBeat. Previously a writer and editor of the MarketTalk column in DowJones Newswires, he has been a guest on the Fox Business Network, CNN, the BBC, and the John Batchelor radio show. He has been interviewed by Bitcoin magazine and appeared on the Bitcoins & Gravy podcast, and boasts a collective 20 years of journalism experience.