The Internet of Money by Andreas Antonopoulos – a modern classic on Cryptocurrency and blockchain technology
Another book to add to your list of classics on the subject of modern technology is The Internet of Money by London born, Athens raised Andreas Antonopoulos. Published in 2016, with volume 2 in 2017, it is a compilation of talks given by the author over the past few years to hundreds of audiences globally. You can watch the talks on Youtube if you like, but they are now available in written word as a reference and should be standard reading for anyone considering themselves technologically literate or informed today. In fact the author is lecturing on the first ever course offered at a university on the subject, so this is mainstream.
I summarize some of the points in the book here to give you an idea of it. To begin with Mr Antonopoulos starts with an astounding perspective by putting into context just how revolutionary bitcoin and blockchain is: The children born today, he says, will never have a bank account, a driver’s licence or paper money. It may be incomprehensible to us adults, but we can compare today’s inventions to that of the television in the mid twentieth century and the internet of the late twentieth century. Children born with them could never imagine the world before they existed. I remember when television first came to my country when I was a small child. Before that we all listened to the radio – for everything from news to sports to entertainment. Then TV arrived with obvious fanfare and eager anticipation by all. Who today can imagine a world without it? Similarly with the invention and roll out of the internet in the nineties, many were left behind or were slow to get on board. It was considered a tool for criminals or the CIA for example, but look where we are today. Bitcoin is simply the next stage of evolution in modern technology that will redefine banking, record keeping and money. It is as liberating as the internet and the printing press before that.
Before the arrival of blockchain technology and bitcoin we didn’t care about securing our digital information like our photos for example. We didn’t worry that our location was being tracked everywhere we went, or about posting all our daily activities on Facebook. We may have even used the same obvious password for all our online accounts. We had no idea what 2FA (two factor authentication) was. Today it’s a different world and we take our online fingerprint or presence much more seriously, in a world of data leaking, data ownership and trading, state surveillance and identity theft. The blockchain can secure all of that. And being uncensorable or immutable, it can’t be removed, tampered with or altered by unscrupulous actors who wish to silence truth or rewrite history in their own image. None of that is possible with your data once it is on the blockchain, unlike the internet where everything is vulnerable.
Although we only hear about blockchain as the technology behind bitcoin, we must also include the other three foundational tech concepts, namely “Proof of Work”, “peer to peer networking” and Cryptography, according to Antonopoulos. Peer to peer (P2P) refers to the distributed architecture of blockchain tech. There is no superior, all are equal and there is no central administrator in this kind of system. It is used on the internet already, where all computers share the work or info of all the others. File sharing is a popular expression of it, like when you download a movie via a torrent system. It is a two way flow of data. It’s great because it’s difficult to take down since even if you shut down one of the peers, the others continue with the same work. It is extremely scalable, meaning you can add new peers without any central configuration. And interestingly the larger the P2P network, the faster it is. The file is downloaded from all locations simultaneously. Not only pirates use it, although it can lead to copyright infringements if used illegally. Still it’s cheap and efficient and P2P is one of the core features of bitcoin. As for “Proof of Work”, even the pyramids are proof of work for the ancient Egyptians. They were expensive, required a lot of resources and exist as a testament to the effort involved. Blockchain does the same today with bitcoin mining.
Another noteworthy concept or feature of bitcoin is its decentralization through computers, as mentioned above. This adds extra security since there is no authority in the center. It is based on pure market forces and “game theory” – using incentives and punishment to direct outcomes.
Blockchain is like a database. Curiously the term Al Qaeda originally translates as “database”, referring to a list made up of assets used by the CIA to destabilize sovereign nations and give the appearance of a terrorist threat so that America could intervene militarily or foment regime change via such proxies. But I digress. Blockchain is decentralized, borderless and censorship-resistant, as well as trustless, with no need for trusted intermediaries like banks or governments.
As with the internet – or anything revolutionary – mass adoption takes time. During the early days of the internet many were suspicious. Email was the only popular use, and eventually everyone had it or actually had to have it for work. Similarly bitcoin is to blockchain like the email is to the internet. And the vision of blockchain is far beyond money. It will be used for voting, real estate title deeds, C2C (customer to customer) marketing and cargo tracking, for example.
The book reveals further insights into real vs fake money. The market usually decides the value of anything, not the government. Venezuela is an example of where the Bolivar is being sold for many times less than the official rate. In India the Rupee is being sold at a 22% discount against bitcoin, simply because the Rupee cannot be moved or used outside of India while bitcoin can be used anywhere. And a crucial characteristic of sound money needs to be “portability”. The Rupee doesn’t even have that. Furthermore bitcoin redefines “immutability”. It cannot be changed, is tamper proof, leaving evidence if you try.
Bitcoin is the first planetary scale digital monument of “proof of work”. In decades to come people will marvel at bitcoin for its immutability, built on the blockchain, unable to lie or be forged. Proof of work secures this. Mining bitcoin simply provides security based on consensus rules. POW is also POS (proof of stake), but not vice versa. In the past things were “written in stone” and seen as a valid source of reference. Tomorrow it will be “written on the blockchain” with equal power. History is no longer written by the victors, but by expenditure of energy on the tamper proof ledger. Order now comes through autonomy, not through authority, so is no longer vulnerable to corruption, but can give predictable, ordered outcomes not subject to the whim of authority.
With bitcoin we can opt out of using our national currency, avoid negative interest rates – coming soon to a bank near you – as well as surveillance. Attacks may come but they only lead to a more robust and anti-fragile system. Bitcoin not only competes against banks and outperforms them, it also incorporates the even bigger set of unbanked in the grey market of developing nations. Ultimately bitcoin marked a new era in the evolution of money when it launched in 2009. It is here to stay, even if it manifests as Ethereum and not Bitcoin, still one blockchain will reign, and we only really need one, though there may be more than one. Bitcoin allows banking the unbanked and ethereum allows smart contracts; let’s see which becomes the most disruptive to the old corrupted order and which rises to take the evolution of money forward into the next century. Only time will tell.
https://theinternetofmoney.info/
https://www.digitalcitizen.life/what-is-p2p-peer-to-peer