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