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About the Authors

Conrad Barski has an M.D. from the University of Miami and nearly 20 years of programming experience. Barski is a cartoonist, programmer, and the author of Land of Lisp (No Starch Press). He's been using Bitcoin since 2011.

Chris Wilmer holds a Ph.D. in chemical engineering from Northwestern University and is a professor at the University of Pittsburgh. Wilmer's first purchase with Bitcoin was a bag of honey caramels from a farm in Utah. They were delicious.

PREFACE

In writing this book, we wanted to explain the concept and potential of Bitcoin in a more-or-less timeless manner. Boy, was that hard. It would have been much easier to write a book called The State of Bitcoin Right Now: Please Disregard Everything in This Book One Year After Its Publication. The core technology behind

Bitcoin, as well as the larger technological infrastructure around it, is rapidly evolving as this book goes to press. The debates about the legality, price volatility, and merchant adoption of Bitcoin may already be out of date by 2015, and who knows how they will sound in 2025.

To keep this book relevant for the future, we did our best to focus on those aspects of Bitcoin that will remain important forever, and we tried to cover them in a way that is fun. We hope you will enjoy our approach to this fascinating subject.

Acknowledgments

Chris Wilmer would like to thank his wife Emily Winerock and his family for their patience and early feedback. Conrad Barski would like to thank his wife Lauren Barski and daughter Ava Barski for their support as he was working on this book and for their patience during all the weekends and evenings he spent to get it done.

Special thanks go to Richard Ford Burley, for substantial editorial help in the early drafts of this book, and to Patrick Fuller, for reviewing the programming sections. Many of the great people at No Starch Press helped us to get this book into shape, including Serena Yang, Tyler Ortman, Bill Pollock, and others.

WHAT IS BITCOIN?

In the simplest terms, Bitcoin is just another currency. The term Bitcoin refers to the entire currency system, whereas bitcoins are the basic units of the currency.[1] As with dollars, euros, yen, and gold coins, you can save bitcoins, spend them on goods and services, and exchange them for other currencies. However, Bitcoin is the world's first currency that is both digital and decentralized.

A digital currency is one that can be easily stored and used on a computer. By this definition, even dollars can be considered a digital currency, since they can be easily sent to others or used to shop online, but their supply is controlled by a centralized bank organization. In contrast, gold coins are decentralized, meaning that no central authority controls the supply of gold in the world. In fact, anyone can dig for gold, create new coins, and distribute them. However, unlike digital currencies, it's not easy to use gold coins to pay for goods (at least not with exact change!), and it's impossible to transfer gold coins over the Internet. Because Bitcoin combines these two properties, it is somewhat like digital gold. Never before has there been a currency with both these two properties, and its impact on our increasingly digital, globalized world may turn out to be significant.

Sometimes called a stateless currency, Bitcoin is not associated with any nation. However, you should not consider Bitcoin to be in the same category as private currencies, hundreds of which have existed in various forms in the past. Private currencies, whether issued by a person, a company, or a nonstate organization, are centrally controlled and run the risk of collapse due to bankruptcy or other economic failure. Bitcoin is not a company, nor does a single person or organization issue or control bit-coins; therefore, it has no central point of failure. For this reason, nobody can inflate the currency supply and create hyperinflation crises, such as those that occurred in post-World War I Germany and more recently in Zimbabwe.[2]

Many people are asking about the motive behind the creation of Bitcoin, so let's explore the currency's purpose.

  • [1] Similar to how renminbi is name of the Chinese currency, but the yuan is the basic unit.
  • [2] Between 1921 and 1924, the value of the German mark fell by a factor of more than 10 trillion due to overprinting by the government. In 2008, the government of Zimbabwe printed so much of its currency that in a single year, a loaf of bread increased from $1 to $100 billion. In both cases, any savings that people had in the form of national currency were completely destroyed.
 
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