Digital gold bitcoin and the inside story of the misfits and millionaires trying to reinvent money
Digital Gold does an excellent job of detailing how Bitcoin was started, the technology behind it and its evolution over time, the personalities involved, the events that led it to capture the attention of the media, population and gain initial traction.
The challenges of working with a difficult to trace currency are also seen as technology bugs and system crashes occur; as well as legal disputes and outright thefts by hackers. The fact that Bitcoin and other digital currencies represent both power and wealth in its most primal form brings out idealistic innovators, fascinated engineers, enthusiastic entrepreneurs, connected investors and government regulators roughly in that order.
Famous investors and technologists involved in the early days of BitCoin include Marc Andressen, the Winklevoss twins, Fortress private equity fund , Henry Blodget, Charlie Songhusrt, Google employees and others. The detailed history of Bitcoin is also a wonderful case study of contemporary technology adoption. It is an unfinished story as both Bitcoin and other digital currencies continue to evolve.
The philosophical debate this raises is to what degree should contemporary technology and companies built around these technologies enable complete and total privacy? The underlying debate of whether digital currencies as originally envisioned are good, bad or neutral are similar to the issues surrounding the discussion of whether Apple should actively assist the government in de-encrypting the iPhone of one of the shooters in the San Bernadino terrorist attack.
A view often ascribed to libertarians sees the need for the complete freedom of technology from government regulation because governments always end up being corrupt and inefficient. This is in contrast to a view often ascribed to the establishment that is concerned about the ethical, legal and moral behaviors of individuals when not operating within a regulatory framework.
In support of digital currencies, Digital Gold describes the ability and value of a digital currency to be more efficient then a national currency in South American countries and China. At the same time during the formative years of Bitcoin, it was the primary enabler of a site called Silk Road that was almost exclusively used for the buying and selling of illegal drugs, forged passports and other illicit merchandise.
In October of , Satoshi Nakamoto, the mysterious creator of bitcoin, released a white paper called Bitcoin: A peer-to-peer electronic cash system , to an email list of coders interested in digital privacy.
Almost a year later, Nakamoto sent his first bitcoin via email and started inviting others to mine the coins or maintain the blockchain, which is an essential function that makes the distributed platform function. Part of what made the bitcoin system so intriguing to early adopters was that Nakamoto introduced the blockchain technology as a digital ledger, which provides a level of privacy for users, but also allowed others on the network to verify funds and transactions, which, in a sense, solved some of the issues that other electronic cash models faced.
The same logic applies to other cryptocurrencies—both the technologies and the use cases for the technologies are at an interesting life phase. Cryptocurrencies are old enough to show they are sustainable and adoptable, but still young enough that the full spectrum of their uses is unknown.
Another interesting thread that emerges from the telling of the bitcoin story is how the developer community formed and how, since the beginning, there has been varying degrees of tension about some of decisions that go into maintaining and updating the underlying blockchain. If you ever hang out any of the bitcoin-related sub-Reddits, you understand that this is still an ongoing problem.
One really amazing thing is that in the early days there were several times when members of the fledgling bitcoin community made contributions to the blockchain code, or to the bitcoin mining process, that might have cut cross grains to their individual self-interest, but that were beneficial to the survivability of the network.