Table of Contents
Preface
I just finished reading Mastering Bitcoin by Andreas M. Antonopoulos. It does an excellent job of explaining the technical side of Bitcoin, the world’s most popular decentralized digital currency, and unpacking what those technical terms actually mean.
The book is fairly technical, assuming a basic grasp of math, programming, and cryptography, but it also delves into the philosophical and political issues surrounding Bitcoin. It’s hard to find anyone who hasn’t heard of Bitcoin, yet very few can explain what it actually is. People often say it’s “a kind of money”, but what do we really know about money? What’s the difference between your average national currency and Bitcoin?
What is Money?
Every modern national currency tries to do three main jobs:
- Be a medium of exchange (you can buy stuff with it).
- Be a store of value (it won’t vanish overnight).
- Be a unit of account (it’s how we set prices and track value).
That’s the core of the commodity theory of money. If you’re up for some philosophy, check out this great article from Stanford for a deeper look at what money actually is and how it works, or at least, how we think it works.
Bitcoin has all of those “commodity” properties, but it also has a lot of new and unique features. In my view, that leaves us no choice but to recognize decentralized currencies as a completely new asset class.
Are bitcoins just like national currencies? Obviously not, all national currencies are centralized and have unpredictable supplies.
We could try to think of bitcoins as shares in a company, but there’s no company issuing them or giving you any claim on future profits. So bitcoins aren’t stocks or bonds, and there isn’t really an existing asset class where decentralized currencies fit neatly.
Money as a Software
The days of physical money are long gone. Most of today’s money supply exists in a purely digital form, with no peg to gold or any other physical commodity. The same is true for Bitcoin.
People understand traditional money intuitively. A central bank “prints” it, the banking system distributes it, and everyone trusts the basic deal: work gets you money, and money gets you what you need.
Here’s the difference: Bitcoin is just a computer program, an algorithm that refuses to take orders from any central authority. It’s hard to believe that’s possible without diving into cryptography, but the fact that Bitcoin hasn’t vanished tells us this isn’t science fiction.
In that sense, Bitcoin is closer to gold than to national currencies. You simply can’t print more of it, even if you’re a central banker.
This book is for developers and tech entrepreneurs who want to understand Bitcoin on a technical level. The main point is that Bitcoin isn’t just money. Sure, you can use it as money, but that’s like using a laptop only to display pictures.
The Bitcoin network can execute a set of instructions. People can combine them to create powerful new features, many of which haven’t even been discovered yet.
Blockchain
Mr. Antonopoulos emphasizes that the real innovation isn’t Bitcoin as a currency, but the blockchain technology that underpins it. The blockchain is the core tool that makes Bitcoin possible, and Bitcoin is just the first widely adopted application of this technology.
Strictly speaking, blockchain and Bitcoin are inseparable, and there’s no point trying to figure out which part is more important. What matters is that together they create a new framework, enabling a whole new class of services to be built.
A blockchain is a special kind of database that can store almost anything. The trick is that it’s unforgeable: once data is recorded, it stays there forever. Anyone can read it or add new information, but it’s impossible to alter what’s already there.
The blockchain used by Bitcoin records financial transactions, but it’s not just about account balances. Think about credit history: most companies track it in some way, and for good reason. It helps build trust, and trust is one of the most valuable assets in any society.
Wouldn’t it be useful if a company could instantly verify how trustworthy a potential customer is? Having the ability to present provable facts could improve society, creating stronger incentives to honor contracts and discouraging bad behavior.
This idea is a bit controversial, of course. Sharing your entire transaction history with everyone is risky. While Bitcoin doesn’t fully solve this privacy challenge, I like the idea of selective sharing, maybe as a one‑time proof for a specific purpose. I think that approach could have a future.
New Risks
The author argues it’s not just the tech that matters. Bitcoin has created a whole set of philosophical and ethical issues we need to resolve. What even is money? How should it work? Should it be anonymous? Is less national sovereignty a good thing? We’ll face these hard questions more and more as Bitcoin grows.
Do the benefits outweigh the risks? One of Bitcoin’s earliest uses was an online drug marketplace. Drugs are legal in some places, but in others, selling or using them can get you executed. Bitcoin is a truly global currency, so it can’t be regulated at the national level. The same goes for capital controls. Bitcoin simply can’t enforce local regulations, and it was designed that way on purpose.
It’s no surprise that for some, the first impression of Bitcoin wasn’t great. It was seen as a tool for illegal activities like drug trade and tax evasion. But that perception has started to shift.
Today, you’ll find blockchain research teams and Bitcoin‑specific courses at the world’s top universities. Banks have started putting crypto research into their R&D budgets. It’s become pretty easy to land a job at a major bank if you understand cryptocurrencies, but banks now face stiff competition from hundreds of startups using Bitcoin’s payment network to create cheap alternatives to traditional finance.
Being in Control
Another area where Bitcoin shows its value is in risk management. People are now very dependent on credit cards. What happens if you lose your card on vacation or during a business trip? What if it’s stolen? That can leave you in a tough spot, withdrawing cash can be difficult, especially when you’re outside your bank’s home country.
We can also imagine a situation where someone needs to make a payment, but their bank refuses to process it, whether due to a technical error or an account suspension. With Bitcoin, that’s no longer a problem. There are over 450 Bitcoin ATMs worldwide, and chances are any major city you visit already has one. So if you’ve lost your card, or for any other reason can’t use the banking system, you can simply go to the nearest ATM and swap some sats for local currency.
Conclusion
The possibilities of blockchain and Bitcoin are vast, and viewing Bitcoin as just another currency is like seeing only the tip of the iceberg. I think the author does a good job of getting that idea across to the reader, but he also warns that Bitcoin is still an experiment. It’s unwise to put money you can’t afford to lose into bitcoins.