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Book Review: Attack of the 50 Foot Blockchain

| Posted by Ben Evans Follow 28 Followers , reviewed by Daniel Bryant Follow 699 Followers on Mar 22, 2018. Estimated reading time: 5 minutes |

Key Takeaways

  • The book discusses Bitcoin, blockchain and cryptocurrencies in economic and social terms, rather than purely technical
  • It discusses various Bitcoin case studies, including Mt Gox and the Silk Road
  • Bitcoin mining is no longer decentralised but is instead controlled by a small group of miners that control a large majority of the hash power
  • The book concludes with a detailed examination of the possible use of blockchain for rights management in the music industry

David Gerard's 2017 book, "Attack of the 50ft Blockchain" is an in-depth look at the cryptocurrency space.

The book takes a straightforwardly skeptical angle, and is explicitly intended as a non-technical overview. Rather than focus on details of cryptography and code that describe how a cryptocurrency or a blockchain works, the book discusses the phenomena that have emerged as part of the rise of Bitcoin and blockchain. This includes things such as the anonymous founder, Satoshi Nakamoto, the multiple high-profile failures of Bitcoin exchanges, as well as clear examples of human folly, fraud and unconstrained 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 common parlance within the Bitcoin community, but which may be unfamiliar to newcomers. Next, the book turns to addressing directly some of the most common claims made for Bitcoin. This includes the decentralisation of the currency, and its ambitions to handle international money transfer, remittance, and reaching the unbanked population in the developing world. With one exception, Gerard finds serious flaws with all of the common use cases for Bitcoin.

Having set the scene, the next chapter deals with the early years of Bitcoin history up to and including the Mt Gox crash 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. The coverage of these sites and their collapse is somewhat brief given their importance in bringing Bitcoin into the wider consciousness of the public. However, as in the rest of the book, Gerard provides an extensive set of footnotes and references for further reading.

A short chapter on the decline of decentralisation of Bitcoin mining follows. This is one area where the coverage seems rather thin, especially as this subject is being actively researched in both academia and industry, e.g. the recent paper "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 reason for its absence in the book.

Despite this, salient facts such as:

  • Top 4 Bitcoin miners combined have >53% of the network's hash power
  • Top 3 Ethereum miners have >61% of the hash power power
  • Top spots are contested by only a few miners
  • Only two Bitcoin and three Ethereum miners ever held the top rank
  • To reach 90% of network hash power needs just 16 miners in Bitcoin, and 11 in Ethereum

and:

"Byzantine quorum system of size 20 could achieve better decentralization than proof-of-work mining at a much lower resource cost."

These facts would have rounded out this section, as well as providing support for a key thesis of the book - that Bitcoin has serious shortcomings, even when judged on its own criteria, such as the overriding importance of decentralized systems.

After the discussion of mining, 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 discovered was Satoshi, and Craig Wright, who announced he was Satoshi, before conducting a peculiar media circus, and then backtracking and disappearing. Gerard rules out both as credible possibilities, but once again takes the opportunity to convey something of the sheer strangeness of what goes on in the cryptocurrency world.

The next two chapters cover the state of Bitcoin use in 2017 - first as a payment mechanism and as a financial instrument to be traded on the markets. It is here that the timing of the book's release proves to be rather unfortunate. It was published in July 2017, before the large speculative bubble in the last few months of 2017. As a result, the focus is more on Bitcoin's failure to break through as a payment mechanism for retail transactions, rather than the behaviour of exchanges and markets. The controversies of recent months, such as the use of the Tether token by Bitfinex and recent moves by the financial regulators to enforce greater scrutiny of exchanges are not included. This means that this section of the book already feels a little dated, despite having come out only a few months ago.

The next three chapters cover alternative cryptocurrencies, including Dogecoin and Ethereum, before looking in more depth at smart contracts and the growing use of blockchain as a separate technology divorced from cryptocurrencies. Again, this treatment already seems outmoded - especially given the meteoric rise in popularity of ICOs (Initial Coin Offerings).

Before the Autumn of 2017, it seemed like the big story of the year would be the attempts by governments and consulting firms to substantiate blockchain as a separate entity from cryptocurrencies - which are well covered in the penultimate chapter.However, the final few months of the year produced large rises, and larger volatility, in Bitcoin and other cryptocurrencies. For Ethereum, this interest was largely concentrated in ICOs.

These were touted as an alternative mechanism to equity fundraising, with fewer barriers to participation and no real regulation.

With the sudden interest of the regulator, this is shaping up to be the story of 2018 in cryptocurrency, and so more depth of coverage in this subject would have improved these chapters somewhat - however, hindsight is 20-20, and this was not really a development that could have been predicted when the book was still being written.

The last chapter is a discussion of the potential application of blockchain to the music industry.

The author's acknowledged longstanding interest in music and the music business make this one of the most captivating sections of the book.

Overall, Gerard's style is clearly influenced by his years spent writing about music. His depictions of some of the principals in the cryptocurrency space could easily be describing DJs and bands. This contributes to a comfortable, well-paced read that manages to be engaging whilst still imparting a lot of information. However, it is when he gets onto home ground, such as in the final chapter, that the author displays his most biting insight.

Technically minded readers may find the book a bit light on detail, and it contains no code or mathematics. Instead, it should be read as a primer to the more human aspects, and may be very useful to the reader who is trying to decide whether to invest time and effort in getting involved with blockchains or cryptocurrencies.

The book's website contains more resources, and it is available from Amazon (US & UK) and from Apple.

About the Book Author

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 spokesman for Wikipedia, and is on the board of the RationalMedia Foundation, host of skeptical wiki RationalWiki.org. His website is davidgerard.co.uk. He lives in east London with his spouse Arkady and their daughter.

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