Thursday, March 26, 2015

The New York Times Review

Can't believe I didn't post this earlier, but the New York Times reviewed The Age of Cryptocurrency in its March 22 edition, in a piece written by Columbia University's Emanuel Derman, who called it a "thorough, timely and colorful book."

It's going to sound kind of silly, but to be blunt this is something I've dreamed about for decades. To have your book reviewed in the Times? There just isn't anything that tops that. I'll be honest with you, I get a just a little bit emotional even thinking about it.

This whole past year has been like a storm with this book. It's been a mad dash, and massive undertaking, like trying to run a two-hour marathon, and we never really had time, well, I never did at least, to sit back and just reflect on what it all means. Seeing the book on a bookshelf for the first time was one big moment, like a musician I'd imagine hearing their song on the radio for the first time. It's hard to explain exactly the feeling.

The other big moment is picking up the Sunday Times, and seeing your book reviewed there.

I went out on Sunday morning and bought three copies. The woman at the checkout saw the three copies and said, "who's in the paper?" Nobody buys three copies (at $5 a pop) of the Sunday paper unless somebody they know is in it. It was almost funny. This is the kind of thing you do when your softball team wins the rec league and your team picture's in the local paper.

"Me!" I said, just a bit proudly. I told her about the book, and the review, and seemed very happy for me.

"I'm going to go read it on my lunch break," she said. I believe she did, too.

Anyhow, here's the review, which you can read on the Times' website (and please do give them the click), but which I've also copied and pasted here:

Money, “The Age of Cryptocurrency” ­explains, is “a medium of exchange, a unit of account and a store of value.” But for Schopenhauer it was “human happiness in the abstract,” and for Dostoyevsky “coined liberty.” These passion metaphors reflect the febrile excitement about Bitcoin that Paul Vigna and Michael J. Casey, both of The Wall Street Journal, share in their wide-ranging, interesting account of the origin, past and possible future of this virtual-money wannabe.

Money was traditionally viewed as a tangible commodity (like gold) or an i.o.u. token of trust for settling debts. Then, out of the blue in 2008, the pseudonymous ­Satoshi Nakamoto created Bitcoin, the name of both the digital Internet ­currency and its software infrastructure.

“Cryptocurrency” devotes detailed, ­anecdote-filled chapters to the genesis and reception of Bitcoin. Its political ­origin lay in the 1990s anarcho-libertarian community of the Cypherpunks, cryptographers who developed software to ­preserve privacy in the face of snooping Big Brother governments and corporations.

How does a purchase with Bitcoin work? Think first about what happens when you pay cash: You can spend a ­dollar bill once only, the transaction is anonymous, and involves no fee.

Now, the book explains, think about using a debit or credit card: No actual dollars change hands, but the bank, a central authority, knows what you’ve bought and from whom, adjusts your balance to prevent double spending and charges a transfer fee.

Bitcoin software ingeniously mimics cash. It allows anyone to transfer ­Bitcoins to anyone else — securely, anonymously and directly — preventing double spending, and avoiding the involvement of a central privacy-invading authority that takes more than a nominal fee. It accomplishes this by means of the block chain, a distributed software ledger on the ­Internet that keeps track of all Bitcoin transactions. The block chain and Bitcoin production are the hardest things to ­understand, and the book explains them lengthily and well.

What is a Bitcoin worth? Part commodity (it’s scarce) and part fiat money (of no intrinsic value), it depends on the market, and its price has increased greatly since 2008, with dramatic commodity-like fluctuations. If or as it gets used more widely, its price will stabilize.

The authors enthusiastically cover the pros and cons. If you’re a libertarian, you’ll be glad that governments can’t print Bitcoins, and that you can send them to Julian Assange when Visa won’t. More broadly, Bitcoin can facilitate economic integration of the global poor, the roughly 2.5 billion adults who don’t have bank accounts. Foreign workers remit $500 billion home annually, and Bitcoin could eliminate the fees of 10 percent or more paid to middlemen.

Negatively, Bitcoin scandals have ­included crooked or incompetent businesses like Mt. Gox (a Bitcoin exchange that went bankrupt) and the online black-market drug-trading site Silk Road, shut down by the F.B.I. This sounds bad, but don’t forget that HSBC ­recently paid $1.9 billion to resolve charges of money laundering.

The authors conclude with a wishfully optimistic discussion of Bitcoin’s future. Entrepreneurs are gearing up. The ­venture-capital firm Andreessen Horo­witz is funding apps such as virtual wallets that allow you to spend Bitcoins easily. Some governments are beginning to regulate Bitcoin, others to ban it. Where will it end?

Undoubtedly, easy methods of electronic­ payment will soon arrive. The ­battle will be between centralized — think ­Apple Pay — and decentralized schemes. An anonymized decentralized Bitcoin currency will blur national boundaries and threaten capital controls, exactly what anarcho-libertarians want. But will Bitcoin really bring happiness and liberty? Having observed the unsuppressable libido of capitalism, I’m inclined to think that if Bitcoin succeeds, some corporation will hijack its anarchist roots and make a lot of money the usual way. Meanwhile, Vigna and Casey’s thorough, timely and colorful book is a rewarding place to learn about it all.

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