Crypto Currency – How Bitcoin and Digital Money are Challenging the Global Economic Order
Title: Crypto Currency – How Bitcoin and Digital Money are Challenging the Global Economic Order
Author: Paul Vigna and Michael J. Casey (2013).
Format and Publisher: Paperback – 357 Pages. Published by the Bodley Head (2015).
Review: © Wayne Mallinson (5 March 2016) at www.novationnow.co.za
Challenging Jobs or Liberating the Misused?
Paul Vigna and Michael J. Casey delve into the surreal world of Bitcoin and other digital currencies. Lots of things may be changed by Bitcoin and its satellite and potential parallel industries: The way we do banking and commerce; the entry of billions of people from emerging markets into the global economy; and the loss of white collar, intermediary jobs which are anchored in trust relationships, like insurance-broking, currency exchanging, and asset registering.
Money and Power
Where there is money, there is power, and the current banking system and its centralised rent-taking and position of power and influence with governments, might not wish to see their own disintermediation. Bitcoin especially, has a decentralisation goal for monetary transactions, to offer an alternative to the incumbency of the current rent-takers and to lower transaction fee costs for the man in the street. For this it uses the blockchain, a never ending connected line of blocks – carrying ledger-like bitcoin transaction entries.
Paradise Gained or Opportunity Cost?
Bitcoin may be wildly successful or it may be a dead end, but for now it is alive, impetuous, a white knight and a dark horse all at the same time. You might regret being involved. Equally, you may be sincerely sorry for having chosen a wait-and-see attitude.
This book will at least answer many questions and fill in the colourful journey of digital currencies to date. Unfortunately it may also raise many new questions. Is crypto-currency high-risk, high-reward? Or should crypto-currency be wisely ignored?
An Interesting Read – But Hard Work like Chewing a Tough Steak
For me, this was not a “can’t-put-it-down” book, but it was a book that I wished to finish. It was like learning a foreign language. Like learning a language, I’m sure I would become more fluent with the concepts if I could spend more time with them. The pay-off of hard work may be big – like Edison’s exploration of electricity. From a pure survival instinct, if I was in banking – I’d want to keep an eye on these digital currency developments. If I was an intermediary in a trust-based business, I’d want to know how and why bitcoin and its technologies might threaten my lunch. This review will now cut the steak into bite- (byte-?) sized pieces. To get the whole meal and really digest the concepts – you will have to purchase the book.
Chapter by Chapter
- From Babylon to Bitcoin – The history of money and its need to be a trusted medium of exchange.
- Genesis – The originator of bitcoin, Satoshi Nakamoto, has still never been identified… Not your fairy-tale start.
- Community – Cypherpunks and cryptographers maintain the blockchain ledger while ‘miners’ work-win bitcoins.
- Roller Coaster – Dodgy dealings, massive gains, early losses, digital currency exchanges, and high volatility.
- Building the Blockchain – Each transaction is publically visible – but as encryption strings of 26 to 34 characters.
- The Arms Race – Bitcoin supply halves every four or so years. Demand is generally increasing as supply rate decreases.
- Satoshi’s Mill – Bitcoin-related start-ups spring up over the globe. Exchanges, wallets, retailers, forex, venture capital.
- The Unbanked – The unbanked 2.5 billion are not unreachable with digital money. Digital forex costs are e.g. 1/40th.
- The ‘Everything Blockchain’ – Blockchain-like technologically may replace other trust-intermediated services. Boom!
- Square Peg Meets Round Hole – Bitcoin, the square-peg, meets regulatory frameworks, the round hole. Can or Can’t?
- A New New Economy – Centralisation or decentralisation? Think the Internet and new access, think Uber and Airbnb.
Conclusion: Come What May – Some perspective: 12 million bitcoin wallets versus 5+ billion traditionally banked entities.
Oh, I have just seen on my Twitter feed – “Japan considering making bitcoin a legal currency – 2 March 2016.”