Understanding Bitcoin: Cryptography, Engineering and Economics

Preface

Opinions about Bitcoin are highly polarized between enthusiasts and skeptics. The author believes that the point of view of the skeptics is easier to grasp for someone not familiar with Bitcoin’s technology. The objective of this book is to present the technology and arguments from both sides of the divide so that readers can form an informed opinion of their own.

What drives the passion of the enthusiasts is that Bitcoin is a technological breakthrough that creates many new and interesting applications. As is often the case with brand new technologies, many future applications of the technology might not be envisioned today. Who could have imagined the success of video streaming services or social networks in 1994? Enthusiasts feel the technology will yield many unforeseen applications for many years to come. The fact that most of these applications are intertwined with monetary economics makes it even more interesting.

The economic and technical aspects of Bitcoin are so intertwined that, in the opinion of this author, they should be tackled together. Arguing about one of them without understanding the other would be like trying to run a car with only one pedal: just pressing the gas or the brake pedal. Sure, the driver could descend a mountain with only the brake pedal, but then she could not go much further. Similarly a driver with only the gas pedal could probably ascend a mountain, but she would be better off not trying to descend it. This book covers the technology ...