What is the difference between Bitcoin and the various monies used in multiplayer games? Each is defined by software, is created out of nothing, and can have prices comparable to traditional currencies. To a casual observer, they seem much the same.
But there is an important difference in how they’re designed that affects every aspect of their respective systems: whereas game currencies try to stop cheating by reactively banning users suspected of abuse, Bitcoin proactively prevents various types of cheating by making them impossible, impractical, or less profitable than honest behavior.
Grokking Bitcoin describes exactly how Bitcoin accomplishes that. As you learn about hash functions, digital signatures, proof of work, and many other technical concepts, you’ll see over and over that Bitcoin effectively prevents cheating without requiring the global banning of any user.
The book then demonstrates the many benefits of this key feature. As you learn about addresses, wallets, miners, and nodes, you’ll discover that if no one can cheat effectively, it’s safe to allow everyone to participate in every part of the protocol, leaving no one in a trusted position of authority over the system. And with no one holding a trusted position, there’s no need for identities in the first place. Grokking Bitcoin goes on to show how it’s possible for anyone to use the public Bitcoin blockchain with a degree of privacy.