An occasional review of technology, markets, and ideas.

Note: This post is based on Dan Romero's Crypto Reading List and is still a work in progress. Basically, it's a list of the sources that I found particularly helpful as I started to learn about crypto.

## Start Here

Bitcoin: A Peer-to Peer Electronic Cash System – Satoshi Nakamoto (2008)

Why Bitcoin Matters – Marc Andreessen (2014)

• When he's not busy tweeting (or doing that other capital allocation thing), Marc Andreessen seems to have a habit of penning prescient WSJ op-eds. First was his 2011 "Why Software Is Eating The World". Three years later he was really the first to articulate why bitcoin is actually important from a computer science perspective.

Bitcoin Course – Khan Academy (2014)

• This 2014 video series was the first video series on Bitcoin that I ever watched. In this 7 part series, Zulfikar Ramzan walks through the basics of the Bitcoin protocol (proof of work, transaction records, cryptographic hash functions, digital signatures, and the money supply).

But how does bitcoin actually work? – 3Blue1Brown (2017)

• Grant Sanderson of 3Blue1Brown explores how you might invent your own cryptocurrency from scratch and what are some of the issues you'd want to keep in mind with any protocol.

Why Web3 Matters – Chris Dixon (2021)

• Chris Dixon compares the 3 epochs of the web: Web 1 (1990-2005) which was about community-governed open protocols, Web 2 (2005-2020) which was about the rise of centralized services (aggregators) and Web 3 which is about an internet owned by the builders orchestrated with tokens.

## Cryptocurrency as Money

Denationalization of Money – F.A. Hayek (1976)

• Hayek argues that "the root of all monetary evil [is] the government monopoly of the issue and control of money" and that abolishing the government's monopoly of money with freely floating currencies is the only way for our market economy to survive.

b-money – Wei Dai (1998)

• Wei Dai – a Chinese computer engineer – was originally interested in cypto-anarchy where "the threat of violence is impossible...because its participants cannot be linked to their true names or physical locations." In this article, he proposes a protocol for the creation of money which was (to my understanding) the first to introduce the idea of "proof of work" where you get paid to solve computational problems: "Anyone can create money by broadcasting the solution to a previously unsolved computational problem. The only conditions are that it must be easy to determine how much computing effort it took to solve the problem and the solution must otherwise have no value, either practical or intellectual."

Virtual Money, Privacy, and the Internet – Peter Thiel (1999)

• In this lecture, Thiel speaks about digital money and what it says about the nature of money, capitalism, and politics. He points out that money has no intrinsic value and that what's valuable in an economy are the real relationships that exist between people as they work together in corporations and as individuals. As you think about fiat currency it's basically (value → something the gov’t says has value → value) and it's the intermediate step between the exchange of value that enables things like hyperinflation. So why have it at all?

Shelling Out: The Origins of Money – Nick Szabo (2002)

• In this 2002 essay, Szabo discusses the origin of money and how precursors to money (i.e. collectables) were a type of social technology that let humans solve problems such as reciprocal altruism, kin altruism, and the mitigation of aggression in a way that other animals cannot. "If clams can be money, furs can be money, gold can be money, and so on – if money is not just coins or notes issued by a government under legal tender laws, but rather can be wide variety of objects – then just what is money anyway?"

Bitcoin Is Worse Is Better – Gwern (2011)

• Gwern asks the question "Why Now?" about Bitcoin. Why was 2008 the point when Satoshi released Bitcoin despite the intellectual substrate for Bitcoin having been around for years? Also why was Bitcoin so poorly received? To Gwern, the answer comes down to aesthetics and the fact that Bitcoin is ugly and the way it achieves security and consensus are not elegant.

Bitcoin, What Took Ye So Long? – Nick Szabo (2011)

• Szabo responds to Gwern's essay and suggest that the reason Bitcoin took so long to come about is that while the ideas were floating around, they were "nowhere remotely close to being as obvious as gwern suggests. They required a very substantial amount of unconventional thought."

Money, blockchains and social scalability – Nick Szabo (2017)

• Szabo makes the case that while blockchains are terrible when viewed through the lens of computational efficiency and scalability, they serve to increase social scalability. Satoshi's brilliant tradeoff is that he/she/they "greatly sacrificed computational scalability to improve social scalability."

A Skeptic's View of Crypto (from the Point of View of Monetary Economics) – Katie Haun, Paul Krugman (2018)

• Krugman argues that money "is a lubricant that facilitates transactions, so the entire history of money has been about making it as invisible and frictionless and moving it into the background as much as possible." Hyperinflation is not a worry because the only two examples with 50% MoM inflation are Venezuala and Sudan and addresses the inflation point more broadly by stating that "mostly governments don't abuse the printing press heavily" He concludes that "From the point of view of monetary economists, we're setting the clock back 300 years [with cryptocurrency]."

## Crypto Companies / Business Models

Coinbase – Chris Dixon (2013)

• Dixon points out how Bitcoin is best thought of as an economic protocol for the internet in the same way HTTP and SMTP power browsers and email clients, respectively.

The Bitcoin Model for Crowdfunding – Naval Ravikant, Balaji Srinivasan (2014)

• Naval and Balaji outline how Appcoins could be issued and distributed to users of a network to give them upside in the growth of that network.

Fat Protocols – Joel Monegro (2016)

• Monegro proposed the "fat protocols" thesis back in 2016 and argued that "[v]alue concentrates at the shared protocol layer and only a fraction of that value is distributed along at the applications layer. It’s a stack with 'fat' protocols and 'thin' applications."

Thoughts on Tokens – Balaji Srinivasan (2017)

• Balaji lays out how tokens (which are distinct from equity and are best thought of as digital assets that can be transferred over the internet without requiring consent by any party) can operate in a company's "capital stack." He provides a useful analogy that "Token buyers will be to investors what bloggers/tweeters are to journalists" which will have the implication of enabling everyone to become an investor.

How Binance Became the Most Popular Crypto Exchange in 5 Months – Unchained (2018)

• CZ gives a history of Binance and recounts how he heard about ICOs at a potluck on June 14, 2017, had the white paper written 3 days after that, ICO'd 9 days after that and had \$15mm in the bank a week later. Once Binance launched, it took them 3 months to get to 120,000 users, another three to get to one million, and then a week after that to reach two million. I remember listening to this while on a walk in Vancouver and my mind was immediately blown. I simply didn't know that companies could grow this fast.

## MOOCs

Bitcoin and Cryptocurrency Technologies – Princeton University (2016)

• I think of this as the OG crypto course (with the accompanying book) which tackles crypto more from a Computer Science lens. While it's from 2016,  it's absolutely worth watching since there isn't much that's changed at the core protocol level.

Foundations of Blockchains – Tim Roughgarden (2022)

• This is a fantastic lecture series that Tim Roughgarden has been posting online. This series approaches blockchains from a much more theoretical level. The goal of the lecture series is to build intuition for problems around distributed consensus. Roughgarden starts with the Synchronous Model and works towards the Asynchronous Model with the ultimate goal of understanding the Tendermint Protocol and how it differs from other BFT and longest-chain protocols.

## Alternate Cryptos

Ethereum Whitepaper – Vitalik Buterin (2013)

• Vitalik's original whitepaper which outlines the vision for Ethereum which was to "create an alternative protocol for building decentralized application, with particular emphasis on situations where rapid development time, security for small and rarely used applications, and the ability of different applications to very efficiently interact."

Solana: Reaching for the Limits of Blockchain Performance – Anatoly Yakovenko (2019)

• Here Yakovenko, the creator of Solana, talks about how his experience at Qualcomm led him to frame the crypto scalability problem as one where you make sure the software doesn't get in the way of improvements on the hardware side. As he put it, "Bitcoin has been around for $12$ years so it has 8x the bandwidth, $2^6$ more compute available to individual nodes. However, nothing about the performance of the system is reflected in these improvements which means there is a design mismatch between BTC and the real world." He also points out that sharded scalability solutions (like what Ethereum is doing) are trying to solve an unsolved problem in computer science.

Stablecoins – Rune Christensen (2019)

• One of the main arguments you hear from people is that cryptocurrency can never become money because it lacks price stability. In this episode, Christensen talks about the use case for stablecoins and how their system of decentralized, collateralized lending makes it possible for Dai to remain stable.

## Crypto Narratives (courtesy of the Fourth Estate)

Decentralized Currencies Are Probably Impossible – Ben Laurie (2011)

• "[I]t is far more likely that Bitcoin has not solved the core problem [creating consensus in a group with open , changing membership] and is therefore not a decentralised currency. But if it has, I have shown that we could instead save a lot of energy by using an efficient protocol."

Bitcoin & Gresham's Law - the economic inevitability of Collapse – Philipp Güring & Ian Grigg (2011)

• "The Bitcoin economy exhibits remarkable and predictable stability on the supply side based on the power costs of mining. However, that stability is challenged if cost-curve assumption is not solely expressed by the fair cost of power. As there is at least one major player, the botnets, that can operate at a power-cost-curve of zero, the result is a breach of Gresham's Law: stolen electricity will drive out honest mining. This has unfortunate effects for the stability of the Bitcoin economy, and the result is inevitable collapse."

Bitcoin has a dark side: its carbon footprint – Michael Carney (2013)

• "But, even if taken as just order-of-magnitude accurate, Bitcarbon’s math makes it obvious that we have a real problem on our hands here. Bitcoin’s carbon output impact threatens both the environment and it’s long term viability as an economic system. In fact, it’s inconceivable that major world governments would allow bitcoin (or any other system) to consumer a tenth or a third of the world’s carbon output, as is predicted."

Meet The 'Assassination Market' Creator Who's Crowdfunding Murder With Bitcoins – Andy Greenberg (2013)

• "The website Assassination Market, a crowdfunding service that lets anyone contribute bitcoins towards a bounty on the head of any government official – a kind of Kickstarter for political assassinations. According to Assassination Market's rules, if someone on its hit list is killed – and yes, Sanjuro hopes that many targets will be – any hitman who can prove he or she was responsible receives the collected funds."

Why I want Bitcoin to die in a fire – Charlie Stross (2013)

• "To editorialize briefly, BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. Which is fine if you're a Libertarian, but I tend to take the stance that Libertarianism is like Leninism"

Watching Bitcoin, Dogecoin, Etc – Brad DeLong (2013)

• "Placing a ceiling on the value of gold is mining technology, and the prospect that if its price gets out of whack for long on the upside a great deal more of it will be created. Placing a ceiling on the value of the dollar is the Federal Reserve’s role as actual dollar source, and its commitment not to allow deflation to happen. Placing a ceiling on the value of bitcoins is computer technology and the form of the hash function… until the limit of 21 million bitcoins is reached. Placing a floor on the value of bitcoins is… what, exactly?"

Bitcoin is Evil – Paul Krugman (2013)

• "I have had and am continuing to have a dialogue with smart technologists who are very high on BitCoin — but when I try to get them to explain to me why BitCoin is a reliable store of value, they always seem to come back with explanations about how it’s a terrific medium of exchange. Even if I buy this (which I don’t, entirely), it doesn’t solve my problem. And I haven’t been able to get my correspondents to recognize that these are different questions."

Technobabble, Libertarian Derp and Bitcoin – Paul Krugman (2021)

• "And nowadays we use Bitcoin to buy houses and cars, pay our bills, make business investments, and more. Oh, wait. We don’t do any of those things. Twelve years on, cryptocurrencies play almost no role in normal economic activity. Almost the only time we hear about them being used as a means of payment — as opposed to speculative trading — is in association with illegal activity, like money laundering or the Bitcoin ransom Colonial Pipeline paid to hackers who shut it down."

Crusading for God, Family and...Bitcoin? – Paul Krugman (2022)

• Krugman links the trust-minimization inherent in crypto with "the modern right [which] is all about fostering distrust." He speculates about some reasons why people buy/support Bitcoin include 1) "protection against the perennial fear that governments will inflate away all your wealth" 2) FOMO and 3) fostering societal distrust.

How Crypto Became the New Subprime – Paul Krugman (2022)

• Krugman simultaneously makes the claim that "crypto doesn't threaten the financial system [since] the numbers aren't big enough to do that" but that it needs regulatory intervention since the public needs to be protected by ensuring that investors are "people who are both well equipped to make [a judgement about cryptocurrency] and financially secure enough to bear the losses if it turns out that the skeptics are right." Oh and I'd be remiss if I didn't point out that crypto – according to Krugman – is apparently only good for money laundering and tax evasion.