Читать книгу Bitcoin for Nonmathematicians: - Slava Gomzin - Страница 10

Foreword

by Doug McClellan

I’m a numismatist, which is a fancy word for a coin collector. I’m also a software developer for electronic funds transfer (EFT) systems by profession and, like most readers here, also an investor.

So when Slava told me he was writing a book about bitcoins, I knew I wanted to read it because it was an area I’ve always had an interest in from the three perspectives I’ve just mentioned. Bitcoins mainly tie into the future of electronic payments, but also have been used as an investment vehicle and could very well have an impact on the future of numismatics.

I’ve been collecting coins ever since I was a kid, and started building my collection over 45 years ago with a Lincoln Cent album. For the last 25 years I’ve developed software for the retail merchant industry, and specialized in EFT systems for the convenience store market segment for the last 17 years. When you buy a soda at the convenience store or swipe your card at the pump, there is software needed to process your transaction electronically.

I will expand more on that in a bit, but first I want to introduce you to the author, Slava Gomzin. For those of you who are not familiar with his work from his blog at www.gomzin.com or from the other books he has published in the area of cybersecurity, such as Hacking Point of Sale, along with his Application Security and Cyber Privacy book series titles for electronic data security, I think you will join me in appreciating his insight in this area.

I met Slava in 1999 when we worked together to create an EFT software system through our mutual employer. Slava had emigrated from Russia to Israel when President Reagan had challenged the Russian government to allow its citizens to have more freedom in their lives. Slava was one of those people who saw the opportunity and had the courage to build a new life in a foreign country. He moved his family to Israel, where he found employment using his computer programming skills. Later he again utilized his pioneer spirit when he moved with his wife and children to America, the true land of opportunity.

Slava has proven that hard work and dedication, along with natural talent and abilities, will flourish in a free society. Slava was our team leader in the EFT development group during a time when our company was rapidly expanding here in the United States. While managing multiple development projects with different EFT networks, he had taken an interest in cyber security, which was in its infancy at the time. He read, studied, and attended courses in cybersecurity, and has earned many certifications over the years. Slava also served on the PCI standards committee when the early standards were being developed. So, as you can see, Slava knows cybersecurity. In fact, I would say he is an expert in the field.

In this book, Slava brings the reader along on a journey from the origins of money and electronic payments and into the implementation of bitcoins as a cybercurrency.

I find the term bitcoin to be rather clever as a name. It is not, of course, a coin in the physical sense, but an electronic implementation of money represented by bits, the electronic 1s and 0s that computers use to store data. The origin of bitcoin is rather mysterious, as you will learn in the book.

Using the standard economic concepts that the value of anything is what a willing buyer will pay a willing seller in an arm’s length transaction, cost is what you give up to get something else, and money is a standardization of trade units that allow for marketplace transactions to occur, bitcoins are an attempt to create a new type of currency that is separate from a central system (such as government-issued currency) and that can also be deployed as an electronic payment system.

Throughout history, money has always been physical. The earliest coinage originated in Asia Minor about 2,500 years ago from an alloy known as electrum or “elektron” to the Greeks. It is composed of silver and gold, along with other trace metals, occurs naturally in nugget form, and is found in riverbeds. It worked well for its purpose prior to the development of technology needed to separate elements. Merchants allowed trusted customers to carry a tab (the first use of credit) and pay with electrum coins when the bill was sufficiently high. The nuggets varied in size and weight and were treated as bullion. The first designs on coins were simple striation lines, which mimicked the lines formed on the nuggets from the water flow in rivers. It was Aristotle that championed the importance of having an image on the obverse, which really transitioned bullion into true coinage.

In early colonial America, daily commerce was conducted using coins produced by the official mints of other established nations, along with a hodgepodge of tokens and medals issued by private individuals and mints from inside and outside of America. The first coins issued by the authority of the United States were the Fugio pieces in 1787, and they are some of my personal favorite coins. The design had 13 interlocking circles and a small circle in the middle with the words “United States” around it and the words “We Are One” in the center. On the other side there was a sundial with a meridian Sun above it, the word “Fugio” (the intended meaning is time flies) on the left, and the year 1787 to the right of the sundial. Under the sundial are the words “Mind Your Business,” a saying credited to Benjamin Franklin. To me, this coin encompasses a lot of pride, solidarity, and hope for the young United States of America.

An important characteristic of a sovereign nation is the right to issue its own coins, and America began exercising that right in 1792 by issuing pattern coins, followed by copper coins in 1793, silver coins in 1794, and gold coins in 1795. Before the denominations we have circulating today, there have been some more unusual ones, starting with the half cent in 1793, two-cent pieces (1864–1873) in which the motto “In God We Trust” first appeared, along with three-cent pieces (1851–1889). There have also been half dimes (1794–1873) and twenty-cent pieces (1875–1878). Gold coins have been minted in denominations of $1, $2.50, $3, $4, $5, $10, and $20. Gold $50 and platinum $100 coins are issued today by the US Mint, but these are considered bullion. There have been various reasons for the different denominations, but bitcoin transactions can occur in fractions of a bitcoin, making them very versatile.

As our society moves to a cashless environment, I wonder how that will impact future coin collectors. Bitcoins will never become a collectable, since they lack the characteristics of physical coins. Blockchains are free to anyone and have no varying condition state from circulating. At some future point in time, there won’t be a need for physical coinage and the billions of coins the US Mint currently produces each year will become obsolete. Will there still be an interest in collecting something that future generations would have never used for their intended purpose in their daily lives? Only time will tell.

The future of bitcoins is also unknown. Early investors had a wild ride with large gains followed by large declines as they sought to find bitcoins’ true value in relation to other currencies. They had started to obtain a reputation as taboo due to their use in criminal activities based on the notion that they can be held anonymously. But as Slava explains, bitcoins are not entirely anonymous and can be traced and tracked back to a unique IP address.

One thing is certain: bitcoins are becoming mainstream, and with their lower cost as a payment system, many merchants not only accept bitcoins as tender, some actually prefer them as a cost-saving method for processing electronic payments.

As you read this book, you will learn both the history and possible future of bitcoins. With Slava’s in-depth analysis of the security aspect of bitcoin financial transactions, perhaps you will learn to prefer this cryptocurrency system as well.