Why Bitcoin Matters
By Marc Andreessen
This is the best intro to why you should be excited about Bitcoin. Andreessen Horowitz has been a major investor in Bitcoin related companies, and Marc Andreessen has been talking about its potential since the early days.
“One can hardly accuse Bitcoin of being an uncovered topic, yet the gulf between what the press and many regular people believe Bitcoin is, and what a growing critical mass of technologists believe Bitcoin is, remains enormous. In this post, I will explain why Bitcoin has so many Silicon Valley programmers and entrepreneurs all lathered up, and what I think Bitcoin’s future potential is.”
Bitcoin — The Internet of Money
By Naval Ravikant
Naval wrote this post back in 2014, explaining how Bitcoin was so much more than just an online currency. He walks through some of the potential applications of the technology, many of which have since started being worked on by startups.
“Most people are only familiar with (b)itcoin the electronic currency, but more important is (B)itcoin, with a capital B, the underlying protocol, which encapsulates and distributes the functions of contract law.”
How Digital Currency Will Change the World
By Brian Armstrong
Brian is the founder of Coinbase and wrote this article to explain how cryptocurrencies like Bitcoin could have a massive positive impact on global prosperity. The short version: as economic freedom increases, prosperity increases, and crypto has the potential to provide greater global economic freedom whether governments like it or not.
“Economic freedom is one of the great meta-problems of our time (right up there with A.I., quantum computing, and cheap renewable energy). If we can create more economic freedom in the world, it will serve as a giant economic stimulus package for the world, accelerate innovation, reduce wars, make the poorest 10% better off, overthrow corrupt governments, and raise happiness.”
Learning More About Bitcoin
The Original Bitcoin Whitepaper
By Satoshi Nakamoto
Read it once, go read other crypto stuff, read it again… keep doing this until the whole document makes sense. It’ll take a while, but you’ll get there. This is the original whitepaper introducing and explaining Bitcoin, and there’s really nothing better out there to understand on the subject.
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”
By reading this article, you’re mining bitcoins
By Ritchie S. King
This article helps to understand the blockchain and mining parts of Bitcoin, which in turn will help the white paper make more sense next time you go back to read it.
“What bitcoin miners actually do could be better described as competitive bookkeeping. Miners build and maintain a gigantic public ledger containing a record of every bitcoin transaction in history. Every time somebody wants to send bitcoins to somebody else, the transfer has to be validated by miners: They check the ledger to make sure the sender isn’t transferring money she doesn’t have.”
For almost any other question you’d have about Bitcoin after reading the whitepaper, you can find a concise answer and explanation here. They explain everything in simple terms, and you may find yourself asking questions you didn’t know you should be asking.
By Joel Monegro
This was extremely helpful for helping me understand the app/protocol difference and why it’s so important in the case of bitcoin and blockchain tech. It also highlights why this is a fundamental shift in the architecture of the Internet and applications built on it, and why that matters. Must read.
“This relationship between protocols and applications is reversed in the blockchain application stack. Value concentrates at the shared protocol layer and only a fraction of that value is distributed along at the applications layer. It’s a stack with “fat” protocols and “thin” applications.”
The Fifth Protocol
By Naval Ravikant
Naval explains how coins can be used as a fifth protocol in machine to machine communication for the exchange of value, to weed out transactions and other demands on data that can be costly in huge quantities. It could be used to prevent Spam, DDOS attacks, etc. and even let machines operate autonomously among each other (such as a vending machine ordering its own restocks).
“Cryptocurrencies are electronic cash, and as such, will be used by electronic agents to exchange value, verify contracts, and track identity and reputation. All of a sudden, the computing resources spent by the Bitcoin miners doesn’t seem wasted – it seems efficient, given that it can be used for congestion control and routing of other network resources.”
Learning More About Ethereum
Ethereum is the second most discussed cryptocurrency right now, and the subject of many of the other articles in this series, especially as it relates to tokens.
A beginner’s guide to Ethereum
By Linda Xie
This intro from Linda at Coinbase gives you a quick overview of Ethereum and some of its exciting potential before you dig into the more meaty articles.
“With Ethereum, a piece of code could automatically transfer the home ownership to the buyer and the funds to the seller after a deal is agreed upon without needing a third party to execute on their behalf.”
The Original Ethereum Whitepaper
By The Ethereum Foundation
Like the Bitcoin whitepaper, you’ll have to keep re-reading it until you start to understand more of it, but the whitepaper is the best way to get to know Ethereum in addition to learning more about cryptocurrencies, blockchains, and smart contracts.
“What Ethereum intends to provide is a blockchain with a built-in fully fledged Turing-complete programming language that can be used to create “contracts” that can be used to encode arbitrary state transition functions, allowing users to create any of the systems described above, as well as many others that we have not yet imagined, simply by writing up the logic in a few lines of code.”
Ethereum in 25 Minutes
By Vitalik Buterin
This will be more approachable than the whitepaper when you’re first trying to understand Ethereum. Vitalik is a good speaker and explains Ethereum and its potential well, the only downside is that the camera crew failed to record the slides.
Visions, Part 1: The Value of Blockchain Technology
By Vitalik Buterin
This could also fit in the “getting excited” section, but Vitalik, the creator of Ethereum, outlines his vision for blockchain technology in general in a very easy to read, non-technical way.
“…we will likely discover that at some point we will hit an inflection point, where most instances of “blockchain for X” will be made not by blockchain enthusiasts looking for something useful to do, coming upon X, and trying to do it, but rather by X enthusiasts who look at blockchains and realize that they are a fairly useful tool for doing some part of X.”
Visions, Part 2: The Problem of Trust
By Vitalik Buterin
Part 2 of this series covers why trust is such a big issue, and how blockchains and Ethereum’s smart contracts can help move us to a world where trust isn’t such a big issue in business dealings.
“Trust is a complicated thing. We all want, at least to some degree, to be able to live without it, and be confident that we will be able to achieve our goals without having to take the risk of someone else’s bad behavior – much like every farmer would love to have their crops blossom without having to worry about the weather and the sun. But economy requires cooperation, and cooperation requires dealing with people.”
Introducing Casper: The Friendly Ghost
By Vlad Zamfir
A big difference between Ethereum and Bitcoin, at least eventually, is Ethereum’s plan to use “proof of stake” instead of “proof of work.” This article explains what that might look like and why it matters.
“It is called Casper “the friendly ghost” because it is an adaptation of some of the principles of the GHOST (Greedy Heaviest-Observed Sub-Tree) protocol for proof-of-work consensus to proof-of-stake.”
Proof of Stake: How I Learned to Love Weak Subjectivity
By Vitalik Buterin
This article digs in more on the proof of stake model, why it matters, and why Ethereum is planning on implementing it.
“Proof of stake continues to be one of the most controversial discussions in the cryptocurrency space. Although the idea has many undeniable benefits, including efficiency, a larger security margin and future-proof immunity to hardware centralization concerns, proof of stake algorithms tend to be substantially more complex than proof of work-based alternatives, and there is a large amount of skepticism that proof of stake can work at all…”
Learning More About Appcoins, Tokens, etc.
You’ve probably seen some businesses using appcoins and tokens to raise money and create their own cryptocurrencies. These are about how that process works and the theory behind it.
The Bitcoin Model for Crowdfunding
By Naval Ravikant
Naval proposes a Bitcoin style crowdfunding model back in 2014 before the recent ICO craze. It wasn’t really being done back then, but the market has evolved fairly true to his predictions.
“This is true crowdfunding – get funded by your users in proportion to their usage. Reward early adopters, network operators, and developers with upside.”
Blockchain Tokens and the dawn of the Decentralized Business Model
By Fred Ehrsam
Written two years after Naval’s post, Fred’s article on the decentralized business model will help you understand the potential for tokens more at the conceptual level, with examples from ones we’re seeing in the marketplace today.
“[Company equity] has been used by startups for years to attract employees to a young company, and now decentralized apps are using it to incentivize all potential users around the world to join the app early on.”
How to Raise Money on a Blockchain with a Token
By Fred Ehrsam
This is the followup to the previous article where Fred dives more into the how of raising money through token sales. It covers what kinds of businesses it makes sense to have a token for, and then how to create and sell those tokens.
“Should we consider the token model? In short: if your project has a network effect, yes.”
Thoughts on Tokens
By Balaji Srinivasan
Balaji co-wrote the last article with Naval, and these are his thoughts three years later on the growing Token and ICO market. He covers some of the opportunities, challenges, and thoughts on where tokens might go from here.
“The most important takehome is that tokens are not equity, but are more similar to paid API keys. Nevertheless, they may represent a >1000X improvement in the time-to-liquidity and a >100X improvement in the size of the buyer base… This in turn opens up the space for funding new kinds of projects previously off-limits to venture capital, including open source protocols and projects with fast 2X return potential.”
The difference between App Coins and Protocol Tokens
By Will Warren
These terms get thrown around a lot, so this article was really helpful for understanding the difference between coins, app coins, protocol tokens, dApps, and all of the other token related lingo.
“Each additional building block that is added to our communal tool set will accelerate innovation, leading to new applications for Ethereum smart contracts.”
Other Interesting Articles
This is a collection of papers and articles related to Bitcoin and crypto and the various other projects that I’ve found interesting and helpful, in no particular order.
By Nick Szabo
Szabo proposed the idea of “Bit Gold” back in 2005, and it’s extremely similar to what eventually became Bitcoin, leading some people to speculate that he is the pseudonymous Satoshi Nakamoto who created Bitcoin. This paper outlines Nick’s idea of Bit Gold.
“Thus, it would be very nice if there were a protocol whereby unforgeably costly bits could be created online with minimal dependence on trusted third parties, and then securely stored, transferred, and assayed with similar minimal trust. Bit gold.”
The God Protocols
By Nick Szabo
This article provides some context on why the blockchain system for decentralized trust is so important, and how it compares to old third party mediated protocols. It was written long before Bitcoin was created (1996), and touches on some of the issues that Bitcoin and Ethereum have been created to solve.
“If mutually confidential auditing ever becomes practical, we will be able to gain high confidence in the factuality of counterparties’ claims and reports without revealing identifying and other detailed information from the transactions underlying those reports.”
What is the Lightning Network and how can it help Bitcoin scale?
By Elizabeth Stark
Stark is one of the co-founders of Lightning, and she explains here in pretty simple language (impressive in any blockchain article) how it works and why it’s important.
“Imagine if every computer had to store every e-mail, to receive any. That’s how blockchains work. Lightning Network allows computers to make blockchain transactions, only storing the data they care about—their own money.”
The Company of the Future: DAO
By Dmitry Korzhik
This article goes over some of the potential and benefits of a DAO. It’s a good quick read if you’re not familiar with the concept already.
“The future of the organization is distributed, the DAO happened. Imagine an organization where bosses don’t exist as a definition and voices of all members are heard despite their position in the company. Furthermore, employees don’t exist as well but the company gains its market share and earns the profit.”
The bear case for crypto
By Preston Byrne
Preston is a legal tech entrepreneur who analyses the current ICO market from a legal / tech perspective, pointing out why it’s ripe for popping and some mechanisms for how that might happen.
“The ICO bubble and its promise of cheap, quick gains is rightly the focus of attention for most folks at the moment. It is the promise of the greatest gains in the shortest time with the least effort. That bubble needs to pop before we can get down to business with the utility-driven applications of this technology. And pop it will, as surely as the sun rises in the morning.”
Fiat Currency: What It Is and Why It’s Better Than a Gold Standard
A quick overview of Fiat currency (like the dollar) and, as you can guess, why it’s better than the Gold standard. Also some data on how gold hasn’t been a great investment historically which I found surprising.
“Currency is a tool of trade. People tend to hoard gold and silver when things are uncertain, and that’s harmful when it limits currency flows on a large scale. Removing the relationship between a currency and commodity doesn’t create “worthless money.”
Thank you to Taylor Pearson for writing “The Top 10 Cryptocurrency Resources for Non-Technical People,” Chris Dixon for his “Crypto token roundup,” and Nick Tomaino’s for his list of “Some Blockchain Reading.”