Learn About Bitcoin

Three very useful places to start learning more about Bitcoin are with the Bitcoin white paper by Satoshi Nakamoto and two great books by Andreas M. Antonopoulos.

One White Paper To Rule Them All

Bitcoin: A Peer-to-Peer Electronic Cash System. The original white paper written by the creator(s) – Satoshi Nakamoto.

In October 2008, an unassuming paper was published on The Cryptography Mailing List at metzdowd.com under the name Satoshi Nakamoto. Entitled “Bitcoin: A Peer-to-Peer Electronic Cash System”, this was the document that first heralded the idea of Bitcoin, detailing the digital currency that would be born three months later when the same anonymous Nakamoto launched the first bitcoin software, its network, its “Genesis” block and the resulting first 50 units of Bitcoin.

Only eight pages long with the same number of references, it was a relatively simple yet technologically advanced concept that until this day, stands as the benchmark for disruptive technology and continues to guide, inspire and divide a generation of financial tech experts and cryptography enthusiasts. Long after the person or persons known as Nakamoto disappeared, the Bitcoin network as we know it has grown by proportions stunningly predicted by its creator. It continues to be maintained by an open-sourced community of volunteers coordinated by a core of developers and coders.

More than a new Paypal

Though only alluded to in the title of peer-to-peer, what truly set Bitcoin apart from the conventional idea of digital currency was the concept of trust networks. Nakamoto envisioned a way for people to be able to exchange money electronically through a secure network that had no need for a third party, such as banks or a centralised entrusted entity such as how Paypal worked.

The white paper outlined how cryptography – itself the method of storing and transmitting data so it could only be understood by those intended – would be the means to secure and verify that what you received was genuine… without ever needing to trust the party who sent it.

Thus was Bitcoin known as “cryptocurrency”, a term which continues to be used by any medium of exchange that uses cryptographic methods to secure its transactions. Almost a decade later, Bitcoin has exploded in popularity, if still falling short of mainstream adoption, with businesses and people finding innovative uses for its underlying blockchain technology beyond its original realm of finance.

New Solutions to Old Problems

Apart from the issue of trust, the Bitcoin white paper attempted to take on the age-old problem of fraud, which traditionally was seen as an unavoidable issue for conventional payment methods. According to the white paper, with the way Bitcoin would work, transactions would be “computationally impractical to reverse” to protect sellers from fraud and “escrow mechanisms… implemented”, to protect buyers.

Bitcoin’s irreversible payments was the seller’s dream: credit card chargebacks and Paypal reversals were the bane of aspiring merchants, but similar digital currencies such as e-gold had provided this solution at least seven years prior.

The network was summarized as follows:

1) New transactions broadcasted.

2) Each node collects new transactions into a block.

3) Each node works on finding a difficult proof-of-work for its block.

4) When a node finds a proof-of-work, it broadcasts the block to all nodes.

5) Nodes accept the block only if all transactions in it are valid and not already spent.

6) Nodes create the next block, using the hash of the accepted block as the previous hash.

Crucially, it was Bitcoin’s solution to prevent double-spends (or in practical terms, multiple spending) that would lay the foundations for its unrivalled mode of securing transactions. In a “proof-of-work” algorithm based on existing currency HashCash, every transaction would be verified by a majority decision, represented by the longest chain on the network. While this system was never meant to be perfect, as proven over the years by the ability of users to commit double-spend fraud on Bitcoin, to date, there still has not been an attack on the network that has crippled it.

Conclusion

Eight pages was all it took to introduce to the world the possibility of an unstructured, simple yet robust peer-to-peer network of trust, using proof-of-work to record a public history of transactions that became computationally impractical to alter.

Today’s crytocurrency and blockchain developers continue to pay homage to the precepts that were first outlined in the Bitcoin White Paper. This document, along with the many thoughts, opinions and ideas expressed by Nakamoto in the following years are regarded as the foundations of Bitcoin and still offer valid guidance to its future direction, even pertinent in the current long-drawn scaling debate.

Whether or not Bitcoin’s development will always stay true to the literal concepts of the White Paper or if radical new directions will evolve, only time will tell.

The Internet of Money Overview

The Internet of Money delves into the why of Bitcoin. Written by Andreas Antonopoulos.

If you enjoyed the simplicity and readability of Mastering Bitcoin, then you’ll be pleased to find that Andreas M. Antonopoulos is every bit as enjoyable in The Internet of Money. The renowned future technologist talks about Bitcoin’s relevance in this book: why it is so important and why it matters to us, using a lot of practical and relevant case studies to underline Bitcoin’s potential as a disruptive technology.

Taken from about 150 talks Antonopoulos delivered to various audiences around the world, edited for clarity and compiled into a meaningful structure, you can either read the book as a whole or select topics that interest you, as each section is suitable as a standalone chapter.

The internet of money book cover screenshot

Contextualizing Bitcoin’s significance

There’s a lot to be said about the technology behind Bitcoin. Blockchain is revolutionizing the finance and banking industry as we speak while cryptographic currencies are already making new headway’s into a lot of different new-age digital areas.

Getting your head wrapped around why and how all of this is so important is perhaps one of the steepest learning curves in today’s technology. The mechanics of crypto is such that it is still a very new field with few recognized experts and fewer still people who know its underlying aspects well.

Antonopoulos does  a great job in bringing his visionary ideas into an approachable and amusing way, sharing anecdotes that will appeal to a large audience. In tackling one of the most commonly identified uses of Bitcoin, he starts early by asking “If you think of money as technology… how old is this technology?” And from here, he builds on the concept of Bitcoin as an “abstraction of value” or even as a “language and form of communication”. Through a light look at the evolution of money, he shows how bartering evolved into precious metals, then into paper, then into plastic (credit cards) and how we arrive today at Bitcoin.

Prophetic

When reading back on old posts of Satoshi Nakamoto (anonymous Bitcoin creator), it’s staggering to see how close Bitcoin has come to the predicted situations even from four or five years ago. The Internet of Money is just as surprisingly accurate when talking about its future – at least for the time being.

He pokes fun at what he terms the Grand Arc of Technology, referring us to the propensity of content to start out as the domain of the elite. An easy analogy would be the way traditional finance and banking started resisting Bitcoin and how the media continues to portray it in a negative tone. And there are shades of these in the Bitcoin community, people who believe in the grandiosity of Bitcoin on the simple basis of being early adopters and who then mock those who cannot grasp its complexity.

In the final chapter, Antonopoulos predicts that the scaling debate, which has engulfed the Bitcoin community at least since 2014, will continue for a very long time; decades, in fact, to the point that it will never be truly solved. However, he does not see it as a problem. On the contrary, fierce debate and over complicated analyses by those closest to Bitcoin is seen as something, necessary and healthy.

“Every year we will fail to scale for the next application and succeed to scale for the previous ones,” says the author, who points at the Internet as an example of a technology that has “gracefully failed” to scale since its inception.

Upfront

Sometimes funny and other times playful, the author isn’t afraid to take on some of the shadier aspects associated with Bitcoin. He admits that Bitcoin is still young, unpolished and difficult to use. He acknoledges also that “it’s used by criminals” but counters it just as honestly by comparing Bitcoin to the onset of the Internet:

“When I was on the Internet back in 1991, it was a den of thieves, pornographers, pirates and criminals. But it didn’t matter then and it doesn’t matter now.”

His faith? In that as much as technology can be used for evil, it can also be used to greater good. And that is how the author hopes the future will be for Bitcoin, as he has no care for the fiat value.

“If Bitcoin crashed tomorrow morning, the technology is still revolutionary.”

Mastering Bitcoin Review Overview

Mastering Bitcoin is a guide through the seemingly complex world of Bitcoin. Written by Andreas Antonopoulos.

When Greek author Andreas M. Antonopoulos first discovered Bitcoin in 2011, he rubbished the idea as “nerd money”. But six months later, he came across Nakamato’s famous Bitcoin White Paper and saw its true potential beyond mere digital currency as a decentralized trust network.

He devoted his life to studying Bitcoin over the next four months, the result of which was this almost 300-page authoritative guide for techies on all about Bitcoin and how to master it.

Published at a time when Bitcoin was sobering up from the historic bull run in 2013, Mastering Bitcoin was one of the reasons 2014 was such a watershed year for the world’s best-known cryptocurrency. It was probably the first established attempt at publishing a mainstream book that tried to explain in one volume what Bitcoin was and how to use it – remarkably, it is still one of the most valid learning tool for beginning coders and non-coders alike.

Focus on technicality

Mastering BitcoinAs Bitcoin stumbled around in terms of price, battling the stupor from its high of over $1,100 in November 2013, many predicted that the bubble had finally burst. It was a mixed year: Mt. Gox filed for bankruptcy and lost close to 800,000 Bitcoins, Paypal and Microsoft both announcing partnerships with payment processors using Bitcoin, the Chinese government stirring from all the attention. Bitcoin finally finished 2014 to hover just above $300. It would take two years for it to reach $1,000 again.

Mastering Bitcoin isn’t about all that drama and history: its target audience is for coders so if the reader already has his foundations in programming, this book will teach the reader about the workings of cryptocurrencies, how to obtain and use them, and how to develop software that works with them. If you’re not a coder, the book still works as an in-depth introduction to Bitcoin and will give you an excellent lesson on the inner mechanisms of Bitcoin.

It’s also intended for a global readership, as is evidenced by sharing user experiences in the very first chapter, telling every day stories of Bitcoin users from an art gallery owner in North America, to a children’s charity director in the Philippines and even a miner in China.

A tool for building on Bitcoin

The true value in this book is led on from its title: Mastering Bitcoin. Once you’ve properly mastered the technology behind it and are able to understand precisely how the tech functions, the possibilities of Bitcoin beyond its use as a digital currency are now accessible.

If you’re thinking of building an app which you know will be the next big hit, it certainly won’t hurt to have knowledge on the less understood aspects of Bitcoin such as its decentralized network, its peer-to-peer architecture, transaction life cycles and its security principles.

With plenty of coding interspersed with stories, analogies and practical examples, Mastering Bitcoin remains as important today in crypto literature as it was three years ago when it was first published. Few guides come close when it comes to unraveling the complex into a digestible form.