Chris Pacia's Reviews > The Bitcoin Standard: The Decentralized Alternative to Central Banking
The Bitcoin Standard: The Decentralized Alternative to Central Banking
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While I'm sympathetic to many of the ideas in this book, they are very poorly argued. The first half of the book or so is about the economics of hard money. The author could have charitably considered the pros and cons of such a system and examined alternatives in detail. Instead we are presented with juvenile arguments that give the impression the author has read very little about monetary economics. To the extent alternative views are presented, the author does so only to strawman them. Professional economists would find this section of the book cringeworthy.
The second half of the book is largely raw Bitcoin Maximalism. Not all of it is wrong per se, but it reeks of a zealotry. The sections of the book covering the scaling debate are incredibly biased, presented without nuance, and even factually wrong in many places.
The book gives the impression that the author is an expert on all things Bitcoin, yet there are hints that he does not have a deep technical understanding at all. For example, the author states repeatedly that the block size must be kept low so that ordinary computers can run full nodes. However, in a section trashing the corporate use of "blockchain technology" he correctly states that a "regular off-the-shelf consumer laptop can be made to process around 14,000 transaction per second, or all of Bitcoin's current daily transaction volume in 20 seconds. To process Bitcoin's entire yearly transaction volume, a laptop would need little more than two hours".
Yet a few paragraphs later he says that the block size must still be restricted to 1 MB so that the "operation of the ledger" doesn't become too complex. But what is this mysterious "operation of the ledger" that prevents regular off-the-shelf consumer laptops from running a node despite being able to process all of Bitcoin's yearly volume in two hours?
Hint, there isn't anything. The author just doesn't understand what nodes are doing under the hood to realize the processing of transactions as he described it is basically the extent of what a node does.
Several times he mentions the bottleneck for running a node is storing the blockchain, but he doesn't seem to know that 1) storage is extremely cheap and 2) you don't need to store the blockchain to process transactions. Pruned nodes, which delete the historical blockchain, are still able to process transactions (and with more advanced technologies like UTXO commitments, can even bootstrap new nodes as well).
Finally, he spends a large portion of the book criticizing financial intermediaries and talking about how superior Bitcoin is because you control your own keys and control your own funds. However, when he discusses scaling he suggests that to actually use Bitcoin ordinary people will have to deposit their funds with third party custodians, essentially giving up control of their keys, as the 1 MB of restricted block space will be reserved for the clearing of financial institutions and ultra large corporations. And he presents this without any sense of irony or realizing his contradiction.
All in all the book might be OK to give to someone who knows absolutely nothing about economics or Bitcoin as sort of a first foray into these topics, but if anyone knows anything about either, they will be able to spot the sloppy arguments very quickly.
The second half of the book is largely raw Bitcoin Maximalism. Not all of it is wrong per se, but it reeks of a zealotry. The sections of the book covering the scaling debate are incredibly biased, presented without nuance, and even factually wrong in many places.
The book gives the impression that the author is an expert on all things Bitcoin, yet there are hints that he does not have a deep technical understanding at all. For example, the author states repeatedly that the block size must be kept low so that ordinary computers can run full nodes. However, in a section trashing the corporate use of "blockchain technology" he correctly states that a "regular off-the-shelf consumer laptop can be made to process around 14,000 transaction per second, or all of Bitcoin's current daily transaction volume in 20 seconds. To process Bitcoin's entire yearly transaction volume, a laptop would need little more than two hours".
Yet a few paragraphs later he says that the block size must still be restricted to 1 MB so that the "operation of the ledger" doesn't become too complex. But what is this mysterious "operation of the ledger" that prevents regular off-the-shelf consumer laptops from running a node despite being able to process all of Bitcoin's yearly volume in two hours?
Hint, there isn't anything. The author just doesn't understand what nodes are doing under the hood to realize the processing of transactions as he described it is basically the extent of what a node does.
Several times he mentions the bottleneck for running a node is storing the blockchain, but he doesn't seem to know that 1) storage is extremely cheap and 2) you don't need to store the blockchain to process transactions. Pruned nodes, which delete the historical blockchain, are still able to process transactions (and with more advanced technologies like UTXO commitments, can even bootstrap new nodes as well).
Finally, he spends a large portion of the book criticizing financial intermediaries and talking about how superior Bitcoin is because you control your own keys and control your own funds. However, when he discusses scaling he suggests that to actually use Bitcoin ordinary people will have to deposit their funds with third party custodians, essentially giving up control of their keys, as the 1 MB of restricted block space will be reserved for the clearing of financial institutions and ultra large corporations. And he presents this without any sense of irony or realizing his contradiction.
All in all the book might be OK to give to someone who knows absolutely nothing about economics or Bitcoin as sort of a first foray into these topics, but if anyone knows anything about either, they will be able to spot the sloppy arguments very quickly.
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Reading Progress
September 13, 2018
–
Started Reading
December 13, 2018
– Shelved
March 20, 2020
–
Finished Reading
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