The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order, Paul Vigna and Michael J. Casey; St. Martin’s Press, 2015, 368 pages; ISBN-13: 978-1250065636: $19.00 on Amazon.
Bitcoin is digital money for a digital age, and it could launch an economic revolution.
In The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order, authors Paul Vigna and Michael J. Casey, two longtime Wall Street Journal business reporters, attempt to cut through the hype and demystify cryptocurrency to explore its current uses and future potential. The book is insightful, well-written, and wonderfully informative.
Removing the Middlemen
The goal of cryptocurrency is to cut out the banking middlemen, whose role is to process and verify transactions. Cryptocurrency allows a network of thousands of redundant computers to replace the middlemen, doing their job more accurately and more efficiently than centralized banks and financial institutions
As the authors explain, computer-based currencies have been around for 20 years but had no real success until an unknown genius under the pseudonym Satushi Nakamoto designed a system that worked effectively. Nakamoto gave it to the world all but anonymously, then disappeared from the Internet without a trace on December 12, 2010.
Nakamoto shared a system involving two major breakthroughs: an inviolable universal ledger, which he dubbed the “blockchain,” against which anyone could verify the validity of transactions, and a unique set of monetary incentives to encourage the network’s computer owners to keep the ledger up to date.
Although the authors try hard throughout the book to explain what a blockchain is, it can be summarized by saying it is a vast chain of computers working in a coordinated manner under the same computer code. The blockchain quickly verifies the accuracy of any transaction, removing the possibility of cheating, double-dealing, and fraud.
That may sound simple, but it took years and true genius to develop this foolproof system. The blockchain may be based on unfamiliar mathematical concepts, but the entire U.S. banking system is based on similarly unfamiliar ideas.
In their research on cryptocurrency, Vigna and Casey traveled the world to determine whether the system could have averted a financial meltdown in Argentina and how it is currently working in Kenya. The authors profiled 174 people who have contributed to the growth of cryptocurrency over the past decade as part of their research.
As the authors make clear, eliminating the middlemen of government and big financial institutions will vastly increase the potential spread of business capital and personal financial options. The current political and economic power players see that as a threat, of course, and their reaction to Bitcoin has been predictably hostile.
The narrative and research in this book lay out two possible futures for Bitcoin and cryptocurrency: one in which Bitcoin withers and dies and one where it leads to a future economic revolution benefitting the entire world.
Jay Lehr, Ph.D. ([email protected]) is science director at The Heartland Institute.