📙 The Book
Cryptocurrencies got more popular since the end of 2017, but I always found the idea of a decentralized currency very interesting. Coming from Argentina, a country that (still) has serious economic problems including inflation and currency devaluation, I can see and understand some of the benefits that these kind of currencies can have.
The book talks about Bitcoin, because at that time of writing it was by far the icon of this new type of currencies, but many of these concepts are applicable to a lot of the existent cryptocurrencies.
The book itself is a compilation of talks given by Andreas Antonopoulos around the world, talking about different topics, centered on Bitcoin.
🏦 Economic Inclusion
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.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 102-103). Merkle Bloom LLC. Kindle Edition.
Sometimes people in developed countries think of cryptocurrencies as investments or just as a currencies market. Although it is a facet of any currency, we forget about all the people who have been isolated of the global economy all their life, and cryptocurrency is their first chance of being in.
We live in a world where banking was once a great liberator. It was an invention that moved finance from the realm of kings to the realm of everyday people. That system liberated billions of people. And then it got concentrated, it acquired power, and the power led to corruption. What we’re left with today is not a liberating system, and it’s time to disrupt it. Bitcoin is one of the things that will greatly disrupt centralization of power. […] if you look at economic inclusion and how banking works, we haven’t expanded opportunity. We haven’t expanded access. In fact, we’re now regressing. Economic inclusion is decreasing. The reason it’s decreasing is because these isolated structures of finance, their very architecture, raise walls: national borders, class structures, and differences in how your money and your commerce are treated. We live in a world that is increasingly global and interconnected. There is even an emergent global culture through the internet. And yet our financial systems are parochial, insular, and they’re separated.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 386-391). Merkle Bloom LLC. Kindle Edition.
Who can operate with Bitcoin? What prerequisite should I fulfill to be in the network? Do I need to be approved? Can I send to anyone?
Bitcoin is neutral to the sender, the recipient, and the value of the transaction. […] You can operate on the same level as Citibank. That is truly revolutionary. It takes a hierarchical system of international finance and turns it on its head. Up to now, that hierarchical system has achieved security by limiting access, because that is the main method of trust in our payment systems—you can’t get in unless you’re vetted. Bitcoin creates a completely flat and decentralized network where every node is equal, where the protocol is neutral to the transactions, and it pushes innovations to the edge of the network, allowing exactly the same phenomenon we saw on the internet: innovation without permission. You don’t need to ask anyone if your application can be published on the internet. You don’t need to ask anyone to completely subvert a new industry with your information technology. On bitcoin, you don’t need to ask anyone to invent a new financial instrument, a new payment system, a new service. You can just do it. You can just write the code, and you are now part of an international financial network that can run that code and put you in contact with millions of consumers.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 142-149). Merkle Bloom LLC. Kindle Edition.
If you are in the US you must have heard about “Net Neutrality”. Maybe with Bitcoin we get “Economy Neutrality”.
🙉 Afraid of the change
These are cases where disruptive technologies or practices appeared in the world. How they were introduced, how the society reacted and how ended being adopted.
💴 Paper Money 💵
You think people are freaking out about bitcoin? Imagine how much they freaked out when you told them that now, instead of trading in gold, they would trade in pieces of paper. For a lot of people, this was unthinkable. I mean, after all, clearly this paper does not have any real value. It took about 400 years for paper, as money, to become accepted broadly. It was a big aberration.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 255-258). Merkle Bloom LLC. Kindle Edition.
At least today we are already using digital money, it shouldn’t be that big of a change right? 🙄
💳 Credit Cards
Diners Club was the first to create a credit card, which was a form of traveler’s cheque. Then, people took that and they said, “This isn’t money. Why don’t you give me some of the good old paper money that I know?” That was another big transformation in money.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 263-265). Merkle Bloom LLC. Kindle Edition.
People sometimes forget how fragile the credit cards’ security is. Giving your credit card to a waiter can be like giving your bitcoin private key!
For more than two decades from the first cars, the story was that of infernal, disgusting, dirty, noisy machines that were far inferior to horses, that couldn’t go anywhere, that only weirdos would use, and that, most of the time, killed the occupants and everyone who came anywhere near them. Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 585-588). Merkle Bloom LLC. Kindle Edition.
I’m excited and waiting for 100% reliable self-driving cars here… Sorry, just an opinion. Let’s go on.
When electricity was first domesticated and people started electrifying their homes, do you think the media announced, “This is brilliant! Edison’s a genius! This is going to change the world!”? No. What they said was that this was dangerous technology that would burn down people’s homes.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 604-606). Merkle Bloom LLC. Kindle Edition.
This is incredible knowing how reliable we are of electricity today…
We arrived at a world where The New York Times prints bullshit that sends an entire nation into war, and an Egyptian blogger on the front lines of a revolution prints the truth that nobody wants to hear. Suddenly, the world is upside down. Authority is no longer the person who owns the printing press. Now the person who has the content is what matters. We just did this to currency.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 1140-1143). Merkle Bloom LLC. Kindle Edition.
There are other examples of this, like Youtube and film-making. This is what Andreas calls pushing the innovation to the edges (e.g. imagine being Hollywood the central system and now being decentralized by Youtube and others).
I think one of the most difficult things for people is to explain and understand with Bitcoin is. Maybe because is more than a currency and because the mechanism behind it’s not easy to explain. But, on the other hand, how many people really understands how the national and international economy works?
The fundamental issue in describing bitcoin is that if you use references to our existing experience, that experience is based on thousands of years of understanding what money is in a very physical form. Now, we’re trying to explain a form of money that is completely abstract. “It’s a token that represents acceptance in a network, a network-centric form of money.” But that doesn’t even begin to describe what this thing is.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 267-270). Merkle Bloom LLC. Kindle Edition.
One of the things that the ecosystem has to begin doing is simplifying or adapting the current mental model of people to this new one. And gradually changing it if necessary.
💭 Currency as a representation of ideals
With this new system, you have more that a digital currency, you have a political choice.
With currency, that choice is a much more powerful political choice. We have entered the realm of meta-politics, of politics by algorithm, of the ability for global communities to form around a common consensus of politics through the choice of currency. You want inflation? Use an inflationary currency. You’re a goldbug? Use a deflationary currency. You want a currency that creates a guaranteed minimum income for the poor? Use a currency that expresses those politics. You want a currency that puts aside tokens for carbon sequestration? Use a currency that expresses your green politics. We’re going to start seeing communities, politics, and currencies converge and allow us to make these choices.
Antonopoulos, Andreas M.. The Internet of Money (Kindle Locations 1242-1243). Merkle Bloom LLC. Kindle Edition.
This in particular I find it interesting, supporting causes through the currency you use. Like fighting poverty, corruption, war, ignorance. If the system is easy, transparent and well implemented, I see great opportunities for this.
Although the book is really a compilation of transcripts of public talks and some topics repeat themselves throughout the book, it helps you remember that Bitcoin and cryptocurrencies are not just a manipulated market and where people hodl waiting for their investment to moon. The concept it much deeper, and the opportunities are broad.
I’ll re-read this summary in the future whenever I feel that I need to step back and see the big picture again.
You can find the talks here
I haven’t read the second volume but maybe I will.
If you want to know more from a technical point of view, you can check out Andreas’ book “Mastering Bitcoin”: