What are the best books on Bitcoin, Blockchain, Cryptocurrencies, decentralized networks and cryptography?
The best book on Bitcoin, blockchain, cryptocurrencies, decentralized networks, and cryptography isby Andreas M. Antonopoulos.
This book is great because it doesn’t just examine these concepts for what they are today. Instead, they are placed in the context of human history. It’s like Sapiens meets fintech.
In order to better understand Bitcoin, for example, you need foundational knowledge of both currency and networks.
Currency goes back to the beginning of humans, before even writing.
Networks come in all different shapes and sizes.
As I’ll discuss later, the power and potential of Bitcoin lie in the type of network it is.
Unlike most fintech material today, The Internet of Money is conversational and very easy to grasp because it originated as a series of introductory lectures about Bitcoin.
As of this writing in mid-February 2018, the price of Bitcoin has taken a beating, but I’m just as excited about it as I was just a couple of short months ago when the price was twice as high. The people who see it as a hit it and quit it short-term investment are not.
One of my friends bought some BTC back in December and texted me all excited about it. Now he’s bitching and moaning about the correction.
Most people haven’t taken the time to learn about how impactful blockchain technology is and how it will solve major problems in the world. But those who have are still extremely bullish.
The Internet of Money will give you that insight and even if you aren’t interested in crypto, you should read it to gain a better understanding of money, where it comes from, and where it’s going. Because every single one of us uses money, right?
Here are some of my favorite quotes from the book followed by my commentary:
“Approximately 1 billion people currently have access to banking, credit, and international finance capabilities—primarily the upper classes, the Western nations. Six and a half billion people on this planet have no connection to the world of money. They operate in cash-based societies with very little access to international resources.
“Even in the remotest places on Earth, now there is a cell-phone tower. Even in the poorest places on Earth, we often see a little solar panel on a little hut that feeds a Nokia 1000 phone, the most produced device in the history of manufacturing, billions of them have shipped. We can turn every one of those into, not a bank account, but a bank.”
Bitcoin has the potential to reach the masses, which is why Antonopoulos calls it “the money of the people.” This fact alone makes it a big deal.
As a US citizen, I can open a brokerage account within minutes. After reading IoM, I realized that this is something that many of us, including myself, take for granted. But for the majority of people in the world, it’s a fantasy.
“One of the most important principles of the internet is neutrality. The internet does not distinguish between a large organization and a small organization. It does not know the difference between CNN and an Egyptian blogger. It allows the Egyptian blogger to speak to the world with the same power of voice that CNN has. Bitcoin is neutral to the sender, the recipient, and the value of the transaction. That means it gives every citizen, every user of bitcoin, the ability to innovate in terms of financial instruments, payment systems, and banking. You can operate on the same level as Citibank. That is truly revolutionary.”
This is a difficult concept to grasp because it hasn’t yet been realized and we don’t know how it will take shape in its final form.
But with Bitcoin, we are moving towards a world where anyone with a cell phone can create and run their own financial institution as easily as starting and writing a blog.
“Throughout history, the most amazing technology is adopted by criminals first.”
When I try to discuss Bitcoin with some of my friends today, they think it’s this evil, corrupt thing because that’s what they hear about in the media and for that reason, don’t want to have anything to do with it.
But the truth is that the internet started out as a vehicle for criminals as well. So did electricity. So did automobiles (literally).
“What’s remarkable about that is that it’s faster than the rate of investment in the internet in 1995. We are ahead of the curve. Bitcoin is growing faster than Twitter did in the first three years. Bitcoin is growing faster than Facebook grew in the first few years.”
Facebook went from a handful of users on college campuses to taking over the world in, what? A few years?
If Bitcoin is ahead of that pace, imagine what kind of impact it will have on the world in just a couple of years. This is why I want to get invested NOW.
“Every day, an immigrant somewhere cashes their paycheck and stands in line to wire 50 percent of that paycheck back to their home country to feed their extended family. Here in the US, 60 million people have no bank accounts, yet they cash their paychecks and send them abroad. Overall in the world, $ 550 billion is transmitted every year as remittances from first-world countries. Much of that money is sent to five major destinations: Mexico, India, the Philippines, Indonesia, and China. In some of these places, remittances represent up to 40 percent of the local economy. Sitting on top of that flow of $ 550 billion are companies like Western Union, and they take, on average, a cut of 9 percent of every single one of these transactions out of the pockets of the poorest people of the world.”
This blew my mind because I didn’t realize how corrupt the standard of international payment transfer is today.
When immigrants send money back to their families in Bitcoin, their families will get 9% more because they won’t have to pay fees. For the poorest in the world, this isn’t just significant. It’s life changing.
“Bitcoin is simply a dumb network, and that is one of its strongest and most important features. When you design networks, when you architect network systems, one of the most fundamental choices is this: do you make a dumb network that supports smart devices, or do you make a smart network that supports dumb devices?”
“The power of pushing intelligence to the edge, of not making decisions in the center, moves the innovation into the hands of its end users and gives those end users the ability to build applications that are so niche that only a handful of people around the world need them. And they can build those applications without asking for anyone’s permission.”
These two quotes illustrate perhaps the most important concept in the book: that Bitcoin (and the internet) are inherently “dumb” networks, which is what makes them so powerful.
Dumb networks remove the bottleneck of a central authority to make improvements. Anyone can participate with very little barrier to entry and make enhancements to the system that immediately benefits the entire network. This is another reason why it is poised to grow so quickly.
“Flat, paved roads not only allow the automobile to exist, allow the horse to comfortably exist, but they also open the door for new technologies. Now, you have people riding Segways, scooters, skateboards, rollerblades, pushing prams and all of the other things that are moving around on our streets. That’s an infrastructure inversion. You start with the new technology living on the old infrastructure and then, it flips. You build infrastructure and then the old infrastructure rides on top, on the infrastructure designed for the new technology.”
“I predict, over the next 15 to 20 years, we’ll see a great infrastructure inversion happen in finance. First, the banks will resist. Then, the banks will adopt. The banks will run their systems alongside blockchain and bitcoin systems, and finally they will run all of traditional banking as an application on top of a decentralized trusted ledger. Because, while it is very hard to do a decentralized trusted ledger that’s connected to all of these legacy banking systems, simulating legacy banking on top of a decentralized ledger, on top of bitcoin, an open global blockchain, is trivial. All you have to do is take all of its capabilities and slow them down.
Cars failed initially because roads sucked. But people back then blamed the cars, not the roads. Once roads improved, everyone loved cars.
The same thing will happen in the internet of money. Right now, the infrastructure isn’t there. But it’s being built out quickly. And when it is, traditional banking won’t stand a chance.
“Adoption is not simply the act of using the currency; it’s also attaching oneself to a community that has also chosen to adopt that currency.”
Another important concept of cryptocurrencies is that users will be able to exercise their “vote” by way of use. Unlike national currencies, which we are forced to use because of where we live, we will eventually be able to decide which currencies to use based on how they best serve our needs.
“Here’s a little thought experiment: Let’s take three radically disruptive technologies and mash them together. Bitcoin. Uber. Self-driving cars. What happens when you mash the three together? The self-owning car. A car that pays for its Toyota lease, its insurance, and its gas, by giving people rides. A car that is not owned by a corporation. A car that is a corporation. A car that is a shareholder and owner of its own corporation. A car that exists as an autonomous financial entity with no human ownership. This has never happened before, and that’s just the beginning.”
This was perhaps the most mind-bending passage in the book for me. You can’t even fathom how this scenario would play out in today’s world. But cryptocurrencies make it possible for non-human entities to own stuff and transact with each other and with humans. Kind of like corporations today, but on an IoT scale.
“By separating the message from the medium, your perception of value shifts from the cost of production to the value it has to the consumer when they consume it.”
“Every generation mistakes the medium for value and considers the next iteration of the medium—that widens access, that opens availability, that broadens the range of expression—they consider that medium trivial, vulgar, cheapening the message. What they don’t understand is when you cheapen the medium, you release the message and you elevate it. You are able now to express a broad range of messages.”
When Amazon made publishing available to the masses, it “cheapened” the medium of books. But eventually, it forced consumers to discern between the real value they got from reading books and the perceived value that was inherent in the gatekeeper-based traditional publishing system. With Bitcoin, finance is poised for a similar revolution.
“Scaling is a moving target. Scale defines the edge of today’s capabilities. As it moves forward, capability increases.”
This was in reference to the challenges of scale that the internet faced in its early days and continues to face today. No one ever thought it would be possible to transfer pictures and then audio and then video online, but the internet overcame all of these obstacles one by one.
The blockchain world will face similar challenges and it will overcome them because like the internet, anyone can get in the game. Smart people will see opportunities within these challenges and capitalize on them.
That’s what this is all about in a nutshell: opportunity.
Massive opportunity on a scale never seen before. After it’s all said and done, the world will never be the same.
If you want a glimpse into this new world opportunity, then you should read.
First published on Quora.