The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them (Cryptography, Derivatives Investments, Futures Trading, Digital Assets, NFT)

by Antony Lewis

Overview

Understand Bitcoin, Blockchains, and Cryptocurrency

“Antony helps us all clearly understand the mechanics of bitcoin and blockchain.” ―Rob Findlay, Founder, Next Money

#1 Best Seller in Investing Derivatives and Natural Resource Extraction Industry, Futures Trading, Banks & Banking, Energy & Mining, Monetary Policy, and Computers & Technology

There’s a lot written on cryptocurrency and blockchains. But, for the uninitiated, most of this information can be indecipherable. The Basics of Bitcoins and Blockchains provides a clear guide to this new currency and the revolutionary technology that powers it.

Bitcoin, Ethereum, and other cryptocurrencies. Gain an understanding of a broad spectrum of Bitcoin topics including the history of Bitcoin, the Bitcoin blockchain, and Bitcoin buying, selling, and mining. Learn how payments are made, and how to put a value on cryptocurrencies and digital tokens.

Blockchain technology.  What exactly is a blockchain, how does it work, and why is it important? The Basics of Bitcoins and Blockchains answers these questions and more. Learn about notable blockchain platforms, smart contracts, and other important facets of blockchains and their function in the changing cyber-economy.

Things to know before buying cryptocurrencies. Find  trustworthy and balanced insights into Bitcoin investing and investing in other cryptocurrency. Discover the risks and mitigations, learn how to identify scams, and understand cryptocurrency exchanges, digital wallets, and regulations.

Learn about:

• Blockchain technology and how it works
• Workings of the cryptocurrency market
• Evolution and potential impacts of Bitcoin and blockchains on global businesses

You’ve read books such as Blockchain Bubble or Revolution, Cryptoassets, Blockchain Technology Explained, Blockchain Revolution, The Bitcoin Standard, Mastering Bitcoin, or Bitcoin For Dummies, but to really understand the technology read The Basics of Bitcoins and Blockchains.

Product Details

ISBN-13:	9781642506730
Publisher:	Mango Media
Publication date:	04/13/2021
Pages:	408
Sales rank:	197,730
Product dimensions:	5.50(w) x 8.40(h) x 1.10(d)

About the Author

In 2013, Antony Lewis became so interested in a niche online currency called Bitcoin, he left a conventional banking career to join a little startup called itBit. itBit is a bitcoin exchange, a website where clients can buy and sell bitcoins, and was one of the first wave of venture capital funded companies in the nascent cryptocurrency industry. After itBit, Antony privately consulted to clients mainly in the finance and consulting sectors, writing papers and running workshops to explain this new technology to curious professionals. In 2016 Antony joined R3, a financial industry consortium created to collaboratively explore the benefits of blockchain technology. As Director of Research, he explores and explains the evolving concepts and technologies to clients, policymakers, and the public. Antony currently sits on the Hong Kong Securities and Futures Commission’s FinTech Advisory Group panel. Before bitcoins and blockchains, Antony was a technologist at Credit Suisse in London and Singapore having started his banking career as an FX spot trader at Barclays Capital in 2007. Antony lives in Singapore with his wife Sarah and their two children and blogs at www.bitsonblocks.net.

Table of Contents

Part 0 Introduction 12

Some Definitions 13

Part 1 Money 20

Physical and Digital Money 21

How Do We Define Money? 24

A Brief History of Money-Dispelling the Myths 38

Forms of Money 38

Money Through the Ages 43

Gold Standards 63

Fiat Currency and Intrinsic Value 68

Currency Pegs 72

Quantitative Easing 76

Summary 79

Part 2 Digital Money 82

How Are Interbank Payments Made? 83

Same Bank 86

Different Banks 88

Correspondent Bank Accounts 90

Central Bank Accounts 94

International Payments 101

E-Money Wallets 115

Part 3 Cryptography 120

Cryptography 121

Encryption and Decryption 121

Hashes 136

Digital Signatures 140

Why Alice and Bob? 146

Part 4 Cryptocurrencies 148

Bitcoin 149

What Are Bitcoins? 150

What Is the Point of Bitcoin? 151

How Does Bitcoin Work? 153

Bitcoin's Ecosystem 194

Bitcoin in Practice 194

Bitcoin's Predecessors 201

Bitcoin's Early History 207

Bitcoin's Price 224

Storing Bitcoins 229

Software Wallets 230

Hardware Wallets 236

Buying and Selling Bitcoins 240

Exchanges 240

Over the Counter (OTC) Brokers 247

Localbitcoins 248

Who is Satoshi Nakamoto? 249

Ethereum 254

What is Ethereum? 254

How Is Ethereum Similar to Bitcoin? 257

Smart Contracts 275

Ethereum's History 278

Actors in the Ethereum Ecosystem 286

Ether Price 290

Forks 291

A Fork of a Codebase 291

A Fork of a Live Blockchain: Chainsplits 292

What's the Result of a Deliberate, Successful Fork? 294

How Does a Deliberate Chainsplit Work? 295

Media Descriptions 296

Hard Forks vs Soft Forks 296

Case Study 1: Bitcoin Cash 297

Case Study 2: Ethereum Classic 297

Other Forks 298

Part 5 Digital Tokens 300

What Are Digital Tokens? 301

Native Blockchain Tokens 306

Asset Backed Tokens 309

Depository Receipt Tokens 310

Title Tokens 310

How Do Asset Backed Digital Tokens Work? 311

Contract Tokens 314

Utility Tokens 314

Transactions 315

Tracking of Physical Objects 315

Notable Cryptocurrencies and Tokens 319

Part 6 Blockchain Technology 324

What Is Blockchain Technology? 325

What Is Common to Blockchain Technologies? 331

What Are Blockchains Good For? 334

Public Blockchains 334

Speculation 334

Darknet Markets 335

Cross Border Payments 337

Initial Coin Offerings (ICOs) 338

Other 338

Private Blockchains 339

Notable Private Blockchains 343

Blockchain Experiments 346

Questions to Ask 349

Part 7 Initial Coin Offerings 352

What Are ICOs? 353

How Do ICOs work? 355

Whitepapers 355

The Token Sale 357

ICO Funding Stages 359

Whitelisting 361

Funding Caps 362

Treasury 362

Exchange listing 363

When Is a Token a Security? 365

Conclusion 369

Part 8 Investing 372

Pricing 373

Who Controls the Price of Utility Tokens? 379

Risks and Mitigations 381

Market Risk 382

Liquidity Risk 382

Exchange Risks 382

Wallet Risks 386

Regulatory Risks 387

Scams 388

Part 9 Conclusion 390

Conclusion 391

The Future 392

Appendix 400

The Fed 400

Acknowledgments 405

About the Author 407

What People are Saying About This

From the Publisher

“A useful, usable and enjoyable read. Antony helps us all clearly understand the mechanics of bitcoin and blockchain.” ―Rob Findlay, Founder, Next Money

“My family asked me to explain what I do, I gave them a copy of this book. Antony explains cryptocurrencies and blockchain technologies clearly and articulately, whilst remaining witty.” ―Colin Platt, Co-Host Blockchain Insider Podcast & DLT/Cryptocurrency Researcher

“One of the few credible books I suggest when people ask ‘where can I learn about bitcoin?’ [It is an] excellent, level-headed primary on everything crypto. I’ve been in the space for quite some time and I still learned from The Basics of Bitcoins and Blockchains.” ―Zennon Kapron, Managing Director, Kapronasia

“An engaging, clear, and authoritative guide to the applications and implications of blockchains.” ―Greg Wolfson, Head of Business Development at Element Group

“The first book that I’ve seen that really breaks down concepts. [An] excellent insight into the key concepts and real-world implications of bitcoin and blockchain.” ―Zennon Kapron, Managing Director, Kapronasia

“A great resource for anyone who wants to understand what blockchain and cryptocurrency is really all about.” ―Paul Griffin, Associate Professor, School of Information Systems, Singapore Management University

“Einstein said that ‘if you can't explain it simply, you don't understand it well enough.’ Antony clearly understands and articulates the basics of cryptocurrencies and blockchain technologies.” ―Colin Platt, Co-Host Blockchain Insider Podcast & DLT/Cryptocurrency Researcher

“[A] comprehensive overview of the fundamentals. One of the few recommended readings for my new staff.” ―Yusho Liu, Cofounder, Coinhako

“A delightful read that cuts the hype, finds the signal in the noise, and fires on all cylinders from front to back.” ―John Collins, fintech advisor ―This text refers to the hardcover edition.

Editorial Reviews

A useful, usable and enjoyable read. Antony helps us all clearly understand the mechanics of bitcoin and blockchain.”
—Rob Findlay, Founder, Next Money

“My family asked me to explain what I do, I gave them a copy of this book. Antony explains cryptocurrencies and blockchain technologies clearly and articulately, whilst remaining witty.”
—Colin Platt, Co-Host Blockchain Insider Podcast & DLT/Cryptocurrency Researcher

“One of the few credible books I suggest when people ask ‘where can I learn about bitcoin?’ [It is an] excellent, level-headed primary on everything crypto. I’ve been in the space for quite some time and I still learned from The Basics of Bitcoins and Blockchains.”
—Zennon Kapron, Managing Director, Kapronasia

“An engaging, clear, and authoritative guide to the applications and implications of blockchains.”
—Greg Wolfson, Head of Business Development at Element Group

“The first book that I’ve seen that really breaks down concepts. [An] excellent insight into the key concepts and real-world implications of bitcoin and blockchain.”
—Zennon Kapron, Managing Director, Kapronasia

“A great resource for anyone who wants to understand what blockchain and cryptocurrency is really all about.”
—Paul Griffin, Associate Professor, School of Information Systems, Singapore Management University

“Einstein said that ‘if you can't explain it simply, you don't understand it well enough.’ Antony clearly understands and articulates the basics of cryptocurrencies and blockchain technologies.”
—Colin Platt, Co-Host Blockchain Insider Podcast & DLT/Cryptocurrency Researcher

“[A] comprehensive overview of the fundamentals. One of the few recommended readings for my new staff.”
—Yusho Liu, Cofounder, Coinhako

“A delightful read that cuts the hype, finds the signal in the noise, and fires on all cylinders from front to back.”
—John Collins, fintech advisor

From the Publisher