Ambitiously sub-titled “Bitcoin, Cryptocurrency and the journey to being your own bank”, Dingle’s compact and very accessible book offers practical insights and a first-principles discussion of the “evolution of human trust”. Since the Bitcoin bubble of late 2017 most crypto-disciples have gone quiet – Dingle sees this as a natural inflection point in its unstoppable journey of driving a transformation in society that completely changes how we think about money. In very practical language he explains the origins of these shifts – from the cryptic, and still unidentified Satoshi Nakamoto’s original bitcoin white paper to why people are making lots of money storing original cryptokitties on the Ethereum network.
But according to Dingle, making money is not the only reason we should be interested in Bitcoin and its underlying technology called Blockchain, also known as Distributed Ledger Technology. (Digital cats are also not a good reason but he does bemoan the fact that his real cat costs him real money.) It’s all about the maths – hence the title – the power and elegance of Nakamoto’s proof of work algorithm and how it offers the world a new system of value with “no trusted third party”. The network itself is a democratisation of financial trust where everyone linked to it can see all the transactions ever completed.
Such wisdom of the crowd dilutes the power of central authorities, (definitely not a bad thing according to Dingle) many of whom have squandered their trusted roles in society. However, despite the greater-good benefits, early adopters are still grappling with their new responsibilities of localised, original stores of digital value. Take James Howells of the UK who lost millions of pounds when he mistakenly threw out an old hard drive containing 7500 Bitcoins. Or the so-called DAO hack which cost users $75m, caused by an exploited loophole in a tokenised crowdfunding initiative.
Any system is reliant on the trustworthiness and competence of its human users – we still haven’t figured out a solution for that but perhaps the ongoing evolution of cryptocurriencies pivots us in the right direction. At least we should be informed before taking a position and despite Dingle’s strong views on some topics, his book is an excellent 101 that draws on his experience at Luno and extensive knowledge of the subject. After a 2011 cover story for Finweek Magazine he endured much criticism for suggesting Bitcoin would be worth thousands more than the $8 it was trading at the time. He took no pleasure in being proved right and still advocates for the free market as the best determinant of value.
Simon also curates some very useful online sources of information and lesser known facts about the cryptocurrency world. Such as the Blockstream satellites which launched in 2017 and run the Bitcoin node software meaning that in theory Bitcoin can still run without the internet (or the world?). Or that Arizona has recently legalized Bitcoin as a means of paying tax and that Bitcoin was designed to be “divisible to the degree that everyone on the planet could own some”. Although the limit of full Bitcoins is 21 million, each of these can be split into 100 million smaller units called Satoshis.
The story of Bitcoin and its evolutionary forks is the story of human change; waves of ideas slowly reshaping the beachheads of reality. Crypto-sceptics point to Bitcoin’s price volatility, crypto-believers like Simon Dingle talk about its beneficial design principles and their value for society. His book is a call to action, not only for a new way of thinking about money but also for new expectations about restoring trust. Simon also still believes the Bitcoin price has significant upside despite the 2017 bubble – which is great for cryptokitty owners – but presumably he still hasn’t given up trying to monetise his real cat.
