Andreas Antonopoulos on the future of Bitcoin: currency is just the first app

Mastering Bitcoin author says decentralized technology is redefining money

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      For Bitcoin to go mainstream like the Internet did, it will take the work of tens of thousands of software developers to make the six-year-old technology easier for people to use.

      That’s why Andreas M. Antonopoulos wrote the 298-page book Mastering Bitcoin (O’Reilly Media) with computer programmers in mind.

      “When I was on the early Internet, it was relatively difficult to use and kludgy, and there were no graphical user interfaces,” Antonopoulos told the Georgia Straight during a Skype video call from the northeastern United States. “It was all command line. That doesn’t mean I didn’t think mainstream adoption was coming for the Internet. I just could recognize that my mom wasn’t going to use that Internet, and it took 20 years before the Internet was where my mom could use it on an iPad with a finger-swipe instead of the way I used it.”

      An outspoken technologist and entrepreneur, Antonopoulos is one of the most prominent figures in the Bitcoin world. Indeed, when he addressed Canada’s standing Senate committee on banking, trade, and commerce in October 2014, chair Irving Gerstein introduced him as “the bitcoin guru” who has “literally written the book on bitcoin”.

      Antonopoulos told the committee, which is studying the use of digital currency, that Bitcoin combines security and decentralization, is “regulated by mathematical algorithm”, and, contrary to popular belief, doesn’t confer anonymity on users. He urged the Canadian government to give Bitcoin “time to breathe” and not introduce regulations that would hamper the growth of the technology in its early stages.

      “The banks brought you the great recession and global recession of 2008, and geeks gave you the Internet,” Antonopoulos told the Straight five months after his trip to Ottawa. “Who are you going to let write the rules? How’s that for a slogan?”

      Mastering Bitcoin features 10 chapters—covering such topics as Bitcoin mining, security, transactions, and wallets; the blockchain; and altcoins and metacoins—and, thankfully, a brief glossary. In the preface, Antonopoulos recalls that, when he first came across Bitcoin in 2011, he dismissed it as “nerd money”, though he eventually came to see this “decentralized trust network” as the most exciting technology that’s been invented since the Internet.

      Answering the question “What is Bitcoin?”, Antonopoulos writes: “Bitcoin is a collection of concepts and technologies that form the basis of a digital money ecosystem. Units of currency called bitcoins are used to store and transmit value among participants in the bitcoin network.”

      Mastering Bitcoin covers mining, security, transactions, wallets, and more.
      Courtesy O’Reilly Media

      While Bitcoin is widely seen as just a currency, Antonopoulos asserted that this is a “fundamental mistake” because it’s also a technology platform.

      “Bitcoin is the Internet of money, and currency is just the first application,” he said. “The applications are really endless. We’re redefining money, redefining payment networks, creating possibilities for software-based payment systems that have never existed before.”

      According to Antonopoulos, Bitcoin has the potential to offer cheap mobile banking solutions to billions of “unbanked and underbanked” people around the world, and to reduce the high fees paid by immigrants and foreign workers sending remittances to their families in other countries. He highlighted multi-signature transactions and hierarchical deterministic wallets as the biggest recent developments in the Bitcoin space.

      (In Mastering Bitcoin, Antonopoulos points out that parties storing large amounts of bitcoin should consider using multi-signature addresses, because these typically require the authorization of multiple parties to spend their funds. Meanwhile, the hierarchical deterministic wallet represents a significant advancement in the software used to manage Bitcoin addresses.)

      Antonopoulos believes that Bitcoin will lead to the decentralization of many activities that currently rely on centralized institutions acting as “trusted points of control”. Indeed, in The Age of Cryptocurrency (St. Martin’s Press), Wall Street Journal writers Paul Vigna and Michael J. Casey note that some Bitcoin enthusiasts see the potential for the technology to revolutionize online voting.

      However, Antonopoulos suggested that this is more likely to happen with shareholder votes than with democratic elections.

      “I don’t believe in online, electronic, or machine-assisted voting,” Antonopoulos said. “I think the most proven, most reliable, most fraud-proof, most auditable, and most fair voting system that exists on this Earth is paper and pencil.”

      A coffee shop in Vancouver promotes its acceptance of bitcoin.
      Stephen Hui

      As of March 23, one bitcoin was valued at around US$266. On that day, the almost 14 million bitcoins in existence were collectively worth about US$3.7 billion.

      Bitcoin is used as a speculative instrument by some investors, and the small market results in a volatile currency, according to Antonopoulos. He maintained that the price of bitcoin shouldn’t be used to judge whether the technology is a success or a failure.

      Antonopoulos noted that 2014—during which the price plunged almost 60 percent—has been called a terrible year for Bitcoin. Nevertheless, he insisted that it was Bitcoin’s best year yet, based on technological advances and venture-capital investment.

      “Do you judge the Internet by the average price of a DSL connection or the stock price of Yahoo, or do you judge the Internet by the number of services, applications, companies, and innovations it’s bringing to people around the world?” Antonopoulos asked. “I think the difference is that the Internet didn’t have a stock price for the entire industry when it was created.”



      Orinoco Ninja Flow

      Mar 24, 2015 at 5:37pm

      Biggest problem is the blockchain, it's massive. So these wallets with multi-sig will have to rely on 3rd party services that run their own blockchain and offer an API to create these transactions (never for free of course). Bitcoin isn't suitable at all for mobile currency because of the long confirmation time, and general awful security of all our mobile OSs, what is suitable for is backing your new mobile currency. You can create a mobile currency with proven reserves with it quite easily, and launch something like M-PESA in Kenya. Speaking of I send money to Kenya every week using Bitcoin by trading it with M-PESA exchanges. This is the only way I can pay remote farmers they have no access to Western Union or any other civilization but all of them have a phone.

      This book should be interesting, as long as it doesn't recommend rolling your own signed raw transactions because that requires extensive crypto protocol "gotcha" knowledge (google cryptopals to learn).


      Mar 25, 2015 at 5:11am

      Really interesting article. Bitcoin is the first cryptocurrency that has really taken hold around the world. For me, Bitcoin's tech is the revolution and definetely financial services breakthrough. It's amazing what kind of businesses exist around bitcoin. There are even peer-to-peer lending platforms like now which enable cross-border lending. It is already replacing banks and I am willing to see what the future will bring to us in this area ;)


      Mar 25, 2015 at 6:14am

      Andreas Antonoplous is a Bitcoin huckster. If you watch him present, its all about instilling fear into you. Fear that you will be left behind, fear that your dollars will soon be worthless and that Bitcoin is the only answer because everything needs to be distributed and decided by an algorithm. What do the people selling Bitcoin really want? Your filthy fiat money in exchange for a stupid digital token.

      Boyd Thomson

      Mar 27, 2015 at 11:21am

      Great article about a fascinating emerging technology. As a small business owner, I support this technology that helps lift us from the stranglehold of the current financial system. I'm delighted when customers choose to pay with bitcoin at STRETCH and I don't have to give 3% of my gross revenue to wealthy banking executives.