Bitcoin and blockchain may be somewhat off-topic for this blog, but summertime is always a good time for me to pick up off-topic books to read during my vacation. With the current cryptocurrency craze it was unavoidable that I should pick up a book on the topic.
Although I was previously vaguely familiar with Bitcoin and blockchain, I wanted to learn more about what exactly the hype is all about. I picked up the book Mastering Bitcoin: Unlocking Digital Cryptocurrencies by Andreas M. Antonopoulos which came highly recommended on Goodreads. I’m satisfied that I picked the right book because after having read it I can confirm that the book really does explain Bitcoin and blockchain in a way that is both highly detailed and easy to understand.
Throughout the book there are real world examples on how the use of Bitcoin is applied, from simple examples such as buying a coffee to more complex examples using smart contracts. Even math-heavy topics such as cryptography or hashing are well explained and can be understood by anyone with a basic knowledge of mathematics.
I was especially interested in what is the process of Bitcoin mining, having always been curious about what do miners actually do. I now understand that mining is a quite straightforward process, consisting of basically calculating the hash value of a block in the blockchain. What makes it time and energy intensive is that the hash must follow a certain pattern and the only way to calculate a hash that matches a pattern is to try and try again, until the required pattern is matched. This is what takes so much time and effort, so that specialized equipment is required.
A good portion of the book also focuses on security, especially on how to ensure that our Bitcoin is secure. Although there are private keys to ensure privacy, the system is not immune to hacking. The author recommends using off-line hardware wallets, especially for larger sums of funds. On the other hand, the more we secure our funds, the more vulnerable they become to our own unintentional loss of keys. We have to be careful to ensure that our keys are stored both securely while at the same time making them accessible to ourselves as well as to our beneficiaries in situations when we are incapacitated to do so.
I loved this book because it helped me to make sense out of the Bitcoin and blockchain ecosystem. What will I do now with this newly acquired knowledge? I’m not sure yet. As this book made clear, I have no business trying bitcoin mining because it takes heavy equipment and pools of users sharing resources which is not interesting for me. With my limited knowledge around financial markets I am not ready to invest in Bitcoin. Another way to go might be to try to understand how to use blockchain for intelligent contracts or to find other ways for applying the blockchain concepts.
But as stated at the beginning, everything about cryptocurrencies is off-topic for me and interests me predominantly as a hobby. I would definitely recommend the book to anyone who wants to learn more about Bitcoin and blockchain and their applications.