- The book discusses Bitcoin, blockchain, and cryptocurrencies in economic and social terms, rather than purely technical ones
- It discusses various Bitcoin case studies, including Mt Gox and the Silk Road
- Bitcoin mining is no longer decentralized, but is instead controlled by a small group of miners who control the vast majority of hash power.
- The book concludes with a detailed examination of the potential use of blockchain for rights management in the industry. from music
David Gerard’s 2017 book, “Attack of the 50ft Blockchain” is an in-depth look at the cryptocurrency space.
The book takes a distinctly skeptical angle and is explicitly designed as a non-technical overview. Instead of focusing on the details of cryptography and the code that describe how a cryptocurrency or blockchain works, the book looks at the phenomena that have arisen as part of the rise of Bitcoin and the blockchain. This includes things like the anonymous founder, Satoshi Nakamoto, the multiple high-profile failures of Bitcoin exchanges, as well as stark examples of human folly, fraud, and unrestrained greed.
As such, the introductory chapters frame Bitcoin in purely political and economic terms.
These chapters also define some of the fringe concepts that have acquired a common language within the Bitcoin community, but may be unfamiliar to newcomers. The book then directly addresses some of the most common claims made about Bitcoin. This includes the decentralization of the currency and its ambitions to handle international money transfers, remittances and reach the unbanked population in the developing world. With one exception, Gerard finds serious flaws in all of the common Bitcoin use cases.
With the scene set, the next chapter deals with the early years of Bitcoin history up to the collapse of Mt Gox and the Silk Road dark market. These two sites produced some of the first mainstream press covering Bitcoin for a general (but still reasonably tech-savvy) audience. Coverage of these sites and their collapse is somewhat brief given their importance in bringing Bitcoin to the broader public consciousness. However, as in the rest of the book, Gerard provides an extensive set of footnotes and references for further reading.
Below is a short chapter on the decline of decentralized Bitcoin mining. This is an area where coverage seems rather sparse, especially as this topic is being actively researched in both academia and industry, for example the recent article “Decentralization in Bitcoin and Ethereum Networks” by Gencer et al. (FC’18). However, much of the research being done is rather mathematical and not very accessible to the non-technical user, which may be one of the reasons for its absence from the book.
Despite this, notable facts include:
- Top 4 Bitcoin miners combined have >53% of the hash power of the network
- Top 3 Ethereum miners have >61% of the hash power
- Top spots are contested by only a few miners
- Only two Bitcoin and three Ethereum miners ever held the highest rank
- To reach 90% of the hashing power of the network, it only takes 16 miners on Bitcoin and 11 on Ethereum
“The large Byzantine quorum system 20 could achieve better decentralization than proof-of-work mining with a much lower resource cost.”
These facts would have completed this section, as well as providing support for a key thesis of the book: that Bitcoin has serious shortcomings, even when judged by its own criteria, such as the paramount importance of decentralized systems.
After the mining discussion, Gerard tackles one of the most enduring and compelling aspects of Bitcoin: the mystery surrounding exactly who was responsible for creating Bitcoin in the first place. Two very different candidates are discussed: Dorian Nakamoto, who Newsweek claimed to have figured out was Satoshi, and Craig Wright, who announced he was Satoshi, before conducting a peculiar media circus, then backing off and disappearing. Gerard dismisses both as credible possibilities, but once again takes the opportunity to convey some of the sheer strangeness of what goes on in the world of cryptocurrency.
The next two chapters cover the state of the use of Bitcoin in 2017, first as a payment mechanism and as a financial instrument to trade in the markets. This is where the timing of the book’s release proves rather unfortunate. It was published in July 2017, before the great speculative bubble of the last months of 2017. As a result, the focus is more on the failure of Bitcoin to break through as a payment mechanism for retail transactions than on the behavior of exchanges. and markets. . Controversies in recent months such as Bitfinex’s use of the Tether token and recent moves by financial regulators to impose greater scrutiny of exchanges are not included. This means that this section of the book already feels a bit dated, despite only being out a few months ago.
The next three chapters cover alternative cryptocurrencies, including Dogecoin and Ethereum, before delving into smart contracts and the growing use of blockchain as a separate technology from cryptocurrencies. Once again, this treatment already seems dated, especially given the meteoric rise in popularity of ICOs (initial coin offerings).
Before the fall of 2017, it seemed that the big story of the year would be the attempts by governments and consulting firms to establish blockchain as a separate entity from cryptocurrencies, which are well covered in the penultimate chapter. However, the last months of the year produced large increases and increased volatility in Bitcoin and other cryptocurrencies. For Ethereum, this interest was largely concentrated in ICOs.
These were promoted as an alternative mechanism to raising equity funds, with fewer barriers to participation and no real regulation.
With the sudden interest from the regulator, this is shaping up to be the cryptocurrency story of 2018, so more in-depth coverage of this topic would have made these chapters a bit better; however, hindsight is 20-20, and this wasn’t really a development that could have been predicted when the book was still being written.
The last chapter is a discussion on the potential application of blockchain to the music industry.
The author’s recognized interest in music and the music business makes this one of the most engaging sections of the book.
In general, Gerard’s style is clearly influenced by the years he spent writing about music. Their representations of some of the majors in the cryptocurrency space could easily describe DJs and bands. This makes for a comfortable, well-paced read that manages to be engaging while imparting a lot of information. However, it is when he reaches his own ground, as in the final chapter, when the author shows his most scathing vision.
Technically minded readers may find the book a bit light on details, and it contains no code or math. Instead, it should be read as an introduction to the more human aspects and can be very helpful to the reader who is trying to decide whether to invest the time and effort to get involved with blockchain or cryptocurrency.
About The Author of The Book
David Gerard is a Unix system administrator, an award-winning music journalist, and has blogged about music at Rocknerd.co.uk since 2001. He is a volunteer spokesperson for Wikipedia and sits on the board of directors of the RationalMedia Foundation . , host of the skeptical wiki RationalWiki.org. His website is davidgerard.co.uk. She lives in East London with her husband Arkady and their daughter.