My friend Steve Patterson – a brilliant and clear thinker, excellent writer, radical, tech enthusiast, and scholar – has written what I think is the best intro to bitcoin you can find. It’s sufficiently basic, so even a tech noob like me can grasp it, but it doesn’t shy away from delving into the details of how the technology works.
What’s the Big Deal About Bitcoin is the kind of book that, as you read it and immediately after, make you feel like you completely grasp the intricacies of bitcoin. After a few days you can’t really explain or recall exactly what had you so excited. That is a sign of a book that does a great job boiling down really complex ideas. Big ideas take a while to understand, longer to be able to explain to others, and longest to become second-nature. A book this small that can give you the complete intellectual understanding of the concept immediately is rare. One encounter will convince you of the power of bitcoin. Another will help you be able to explain it. I’m reading it for a third time as I try to gain a level of understanding sufficient to convey it to others!
Prior to reading Steve’s book I was excited about bitcoin as currency from primarily a theoretical standpoint. I know the dangers and limitations of government issued currency and the power and beauty of competitive, market-based currencies. I was also very interested in bitcoin as method of payment as a practical solution to the archaic, costly, time-consuming methods currently available to individuals and businesses. Transferring money is ridiculously cumbersome, and the fact that I’ve had to physically enter a bank branch twice in the last month – with several paper documents in hand – is absurd and annoying. I knew bitcoin had potential as both a currency and method of payment, and I loved buying and transferring small amounts to play around with it. What I did not understand was the real source of bitcoin’s value and power, the blockchain itself.
The blockchain is nothing more than a public ledger, but one that is completely decentralized and essentially eliminates fraud and most of the biggest problems that have long plagued both physical and digital financial transactions. But the blockchain is more than just a financial innovation. It’s a unique distributed software process that can be applied to anything where proof of ownership is incredibly valuable and forging such proof is low cost. (Copying paper money, or paper titles, for example). It makes units of digital information, which by nature are infinitely copy-able, into unique, scarce pieces of data. That single innovation has the power to transform the world, and the number of applications and technologies than can be built on top of it are endless.
Don’t get too bogged down trying to understand my explanation – I’m reading the book again to get better at explaining it, but I’m not there yet! Pick up a copy and read it for yourself. I’ll be surprised if you don’t walk away thinking bitcoin is the biggest innovation since the internet.