TL;DR
The recently published The Genesis Book will become a reference work in Bitcoin literature. It gives the reader a glimpse into the lives of the pioneering computer scientists, monetary theorists, and cryptographers who paved the way for Bitcoin. In this article, I will single out three key innovations that made Bitcoin possible, as highlighted in the book. For example, the invention of public key cryptograhpy in the 1970s and the idea to hash documents with their timestamps to create a chronological order of records that can’t be tampered with.
The history of Bitcoin’s predecessors is laid out in The Genesis Book, by Dutch historian and journalist for Bitcoin Magazine Aaron van Wirdum. It is an inspiration to read and makes one nostalgic for a time long gone. Who wouldn’t want to have a time machine and be a fly on the wall of the first meetings of the early ‘Cypherpunks’, in the 80s and 90s?
The Cypherpunks
The shared sense of purpose of fighting for online privacy, the sense of pioneering an entirely new field, what a blast it must have been. It was what united the group of computer scientists and cryptographers who called themselves the Cypherpunks. They bonded in the seventies and eighties on the shared realisation that the nascent internet would gain in importance and would bring pressing issues with online privacy.
They realised that the tools to solve these privacy problems had already been invented – but hadn’t been implemented in software yet. Hence their battle cry:
Cypherpunks write code.
They were activists, but not of the type that just shit on an existing order: they wanted to build a new order.
Ironically, some early Cypherpunks would leave the group in the following decade, disillusioned by the fact that they had built the early incarnations of privacy-preserving electronic cash, but the general public didn’t seem to care: adoption was low.
It would take until the launch of Bitcoin in 2009 when they would find out that people did care about electronic cash but for a mostly different reason than privacy. As the saying goes, they came for the gains and stayed for the revolution. After the 2008 Great Financial Crisis, the realization that fiat currencies get devalued and cripple our purchasing power, made alternatives attractive. This ties in with the second big narrative of the book: monetary theory developed by Friedrich Hayek and his compadres.
How Hayek Got Vindicated Posthumously
It’s a universal type of satisfaction: seeing people vindicated years after they introduced their theories that were at first dismissed. In this case, it’s ‘Austrian’ economist Friedrich Hayek, proven right many decades after seeing his ideas lose out against the rival Keynesian idea of economic planning, which states that governments should dictate monetary policy.
On the contrary, argued Hayek: money should be a technology of the free market: government manipulation only creates instability and leads to extra wealth inequality: those closest to the printing press get wealthier and wealthier, whereas those at a distance suffer most from the inflation created this way.
Hayek remarked in a 1984 interview that “we can’t take money violently out of the hands of the government, all we can do is by some sly roundabout way introduce something they can’t stop.”
It’s not a stretch…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
