Understanding Bitcoin: Cryptography, Engineering and Economics

by Pedro Franco

Discover Bitcoin, the cryptocurrency that has the finance world buzzing

Bitcoin is arguably one of the biggest developments in finance since the advent of fiat currency. With Understanding Bitcoin, expert author Pedro Franco provides finance professionals with a complete technical guide and resource to the cryptography, engineering and economic development of Bitcoin and other cryptocurrencies. This comprehensive, yet accessible work fully explores the supporting economic realities and technological advances of Bitcoin, and presents positive and negative arguments from various economic schools regarding its continued viability.

This authoritative text provides a step-by-step description of how Bitcoin works, starting with public key cryptography and moving on to explain transaction processing, the blockchain and mining technologies. This vital resource reviews Bitcoin from the broader perspective of digital currencies and explores historical attempts at cryptographic currencies. Bitcoin is, after all, not just a digital currency; it's a modern approach to the secure transfer of value using cryptography. This book is a detailed guide to what it is, how it works, and how it just may jumpstart a change in the way digital value changes hands.

Understand how Bitcoin works, and the technology behind it Delve into the economics of Bitcoin, and its impact on the financial industry Discover alt-coins and other available cryptocurrencies Explore the ideas behind Bitcoin 2.0 technologies Learn transaction protocols, micropayment channels, atomic cross-chain trading, and more

Bitcoin challenges the basic assumption under which the current financial system rests: that currencies are issued by central governments, and their supply is managed by central banks. To fully understand this revolutionary technology, Understanding Bitcoin is a uniquely complete, reader-friendly guide.

Genres: Computer Science, Finance, Nonfiction, Economics

281 pages, Kindle Edition

First published October 17, 2014

Reviews

[Travis · Rating 4 out of 5]

This was an interesting book. It was a bit dry at times, as technical information was necessary to understand the following sections, but not everyone is going to like the scholarly pace of this book. It's also a bit dated, having been published in 2014 (3 years ago), and digital currencies have moved on since then, there was a lot of this book that talked about (what was) up to the minute information, that now is no longer valid information. I'd expect this with something as rapidly changing as the digital currency environment, so those who are looking for latest trends, or actual current usage cases won't get as much out of this book as someone who is coming from a completely uninformed background, and just wants to learn what all the hype is about. It's a pretty decent primer, though (as expected) some of the digital currencies mentioned have fallen by the wayside since publication, and some newer currencies weren't mentioned at all.
On the whole though, it did an admirable job of explaining the various digital currency implementations, and giving some usage cases for blockchain technology (the underlying basis of most digital currency), so even though it's a bit dated, it's still worth a read if you're trying to get a handle on what the whole digital currency thing is all about.

[Ali Akbar Zaidi · Rating 3 out of 5]

Understanding Bitcoin is a comprehensive book on Bitcoin and crypto-currencies in general. But make no mistake this book is not for beginners or for those who do not have a technical background in information technology. Although the book contains enormous amounts of simplified details and examples to explain Bitcoin and how blockchains are a revolution of the new Web 3 technology, the later chapters are only intended for academic and technical experts.
The book is in-depth and starts with the origin of Bitcoin in the crisis of 2008 where a man or a company named Satoshi made blockchain as a reaction to Web 2 where giants like Google and Facebook have taken over the Internet. The Bitcoin blockchain works as a series of connected peer to peer systems, much like torrent websites, and Bitcoin has been tested time and again as a store of value on the online linkage of systems called Blockchains which is in-turn confirmed by miners and system validators.
Bitcoin is an open source software and its confirmation technology is guarded by 51% attack or the byzantine general problem solution. Bitcoin is a store of value on the blockchain as an alternative to currency and gold.
Bitcoin supply is limited to 21M and is created as a result of system transactions. The I.T language used in the book was tedious to read but confirms the detailed working of the bitcoin network.

The book also explains alt-coins as copies of Bitcoin with different variation intended for following set of functions set for the future

1. Transactions

2. Holding value that appreciates

3. Smart contracts on the blockchain

4. store of value or reserve

5. Foundation for applications

Bitcoin and crypto-currencies are decentralised and most unregulated which will change in the future. Currencies are listed and traded on exchanges like coinbase and binance and their trade will continue to grow and increase in value as institutional adoption takes place.

Understanding bitcoin is an exceptional book that does what it says, perhaps too well and clearly not all sections are intended for your every day casual reader.

[Nguyen Hanh · Rating 4 out of 5]

The book provides the most detailed technical explanation of Bitcoin and its Blockchain database I have read so far, and also the hardest driest information for a beginner without IT background to understand 😅. After reading this book I was more convinced that Bitcoin and the embedded system of Blockchain is more sophisticated and promising beyond the hype. It was the result of a very early development of cryptography with so much expertise contributed towards an advanced and secure decentralized system.

[A · Rating 3 out of 5]

Featuring all the information required to understand not only Bitcoin (protocol, economics, technology) but other alternatives as well, this is definitely an interesting book for those that are looking to get the fully detailed and in depth information about the technology. More casual readers will do well to give this a pass as they will be prone to information overload and an overall sense of feeling lost.

[Jonathan Davis · Rating 4 out of 5]

Enjoyable and technical, although understandably a bit outdated. Good intro to Bitcoin!

[Andrew · Rating 3 out of 5]

Quite interesting introduction into financial aspects of any digital currency. Too much attention put to internal details of implementation of Bitcoin helper applications, libraries and databases.
Despite many efforts to show how brilliantly Bitcoin algorithms were designed and how secure transactions are, I have not been convinced to invest my money in it. Yet.

[J. Joan · Rating 3 out of 5]

This book really tries hard to cover a LOT about bitcoin and blockchain technology. I admit that I skimmed over many parts, being very technical and me being too lazy to try to sit through it (and also under a deadline). But this is probably a good one to keep on the bookshelf to reference from time to time, though it is self-evident this technology is developing rapidly.

[Dmitry Anoshin · Rating 5 out of 5]

Quite an interesting book. Thorough investigation of the bitcoin ecosystem is presented. But two ending chapters seem to be superfluous for me.