J. Christopher Giancarlo - CryptoDad

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J. Christopher Giancarlo

Copyright © 2022 by J. Christopher Giancarlo. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permission.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data

Names: Giancarlo, J. Christopher (James Christopher), 1959- author.

Title: CryptoDad : the fight for the future of money / J. Christopher Giancarlo.

Description: Hoboken, New Jersey : Wiley, [2022] | Includes index.

Identifiers: LCCN 2021036636 (print) | LCCN 2021036637 (ebook) | ISBN 9781119855088 (hardback) | ISBN 9781119855101 (adobe pdf) | ISBN 9781119855095 (epub)

Subjects: LCSH: Cryptocurrencies. | Digital currency. | Finance—United States.

Classification: LCC HG1710 .G53 2022 (print) | LCC HG1710 (ebook) | DDC 332.4—dc23

LC record available at https://lccn.loc.gov/2021036636

LC ebook record available at https://lccn.loc.gov/2021036637

Cover Image: Mike McGregor Inc.

Cover Design: Paul McCarthy

This book is dedicated to three wise teachers:

Ella Jane, my mother, who taught faithfulness in living;

Henry, my professor, who believed liberty is the goal of learning; and

Regina, my wife, who shows kindness as the essence of love .

Cryptocurrency, or “crypto” as it is colloquially known, is a pretty big deal. In our opinion, a bigger one than the Internet itself. And we believe it has the potential to have as great an impact on personal freedom as the printing press, the personal computer, and the early, open Internet. Why? Because crypto makes decentralization possible, which is to say its center of gravity is you, the individual.

Prior to the invention of Bitcoin, the idea of a decentralized network, in which unrelated computers around the world could reliably reach agreement with each other on something (e.g. who owns what), was thought to be entirely theoretical. The challenge lies in the possibility that one or more computers in the network could be bad actors trying to confuse the others.

In computer science, this agreement problem is known as The Byzantine Generals' Problem. When Satoshi Nakamoto, Bitcoin's pseudonymous creator, published the Bitcoin white paper in 2009, she, he, or they presented the world's first ever solution to this hitherto intractable problem. As described, the Bitcoin mining algorithm ensures that a network of computers that don't know each other will in fact reach agreement with each other in a reliable manner. And that this agreement or consensus—what today, we call a blockchain—would be immutable and verifiable.

Historically, such agreement had to be entrusted to a central party or ended up concentrating toward one. Money has long been the purview of governments and finance the domain of big banks. Tim Berners-Lee's original, utopic vision for the commercial Internet—an open network of interconnected computers—has become a closed, dystopic oligopoly of data cartels. When you log on to the Internet today, you're really logging on to one of five companies: Facebook, Amazon, Apple, Netflix, or Google, aka the FAANG companies. Has there ever been a more appropriate acronym?

The problem with centralization of power was captured best by Lord Bryon: “Power corrupts; absolute power corrupts absolutely.” These sectors are centralized, not because it is the best approach, but because it has been the only approach … until now. Satoshi's breakthrough not only made the decentralization of money possible, but it also provided a blueprint for the decentralization of anything.

We now can envision a future where the Internet, finance, and money will not be controlled by a few, but by the many. Where the value of these social networks (they are all social networks) will not accrue to just a handful of CEOs and companies, but to all of us, their users. Where you no longer need someone's permission to invest, borrow, or build. A level playing field with no inside baseball.

Bitcoin was the first cryptocurrency as we have come to know them. It has created an entirely new economic sector we now call crypto. This sector, like the Internet, has grown from total obscurity into one that can't be ignored. While today, it still appears to most as a niche technology, tomorrow it will be everything. When Jeff Bezos was first pitching Amazon to potential investors, the first question he was always asked was, “What's the Internet?” Crypto's story arc will be no different.