Blockchain: Blueprint for a New Economy

Perhaps the reason I have organized my life to be biased towards more freedom and less money is that money is, to me, unpleasant stuff. It's unhygienic and stressfully complex. Cryptocurrencies do seem to have the former under control, but, to me, they do nothing for the latter. I'm no stranger to public key cryptography (my PGP key is from 1999) and while I think it's great that the fundamental ideas of asymmetric cryptography are being applied with enthusiasm in diverse fields, I'm not sure LaZooz and its ilk are really the harbingers of profound progress that this book seems to think they are.

To start with this book was filled with grand but hollow language. For example.

"Blockchain technology can potentially unleash an important element of creativity and invention in anyone who encounters the concepts in a broad and general way. This is in the sense that it is necessary to understand the new ideas separately and together."

"Blockchain technology could be used in the administration of all quanta."

"The specifics of how they might be different or similar are emerging, and there is presumably a lot of functionality fungibility..."

"...blockchain could become a mechanism for applied ethics."

"...just adding blockchain technology as a feature to existing... activities could be enabling."

"The concept is 'blockchain technology + in vivo personal connectome' to encode and make useful in a standardized compressed data format all of a person's thinking."

"...units of synaptic potentiation in brains..."

"...reunderstood..."

Once past the style issues the book was pretty much a non-technical advertisement for using blockchain strategies. There is a lot of hand waving such as, "Tomorrow, the contract could be automatically completed by a software program..." While a bit nebulous, more interesting to me is the tone of this next bit, " participants... should satisfactorily inform themselves of the security details." Take that, lottery-winning Nigerian princesses! Security details would have been a practical use for this book had it contained any. On the contrary, it had problems like proposing the idea of a "Blockchain Passport - Proof of Existence" while using the unfortunate example of person who we know has at least some other form of "proof" of existence _as a different person_ (i.e. Satoshi).

I personally am interested in blockchains for attestation. But the concept is invalid without the monetary incentives of cryptocurrency (as far as I can tell). If that cryptocurrency is victim to a mania, panic, or crash, the attestation (and loads of wonderful things this book promises) will go down with it.

One of the more grander promises the book makes on behalf of blockchain technology is more freedom. Perhaps the restrictions on consumer genomics are indeed "a classic case of personal freedom infringement". Perhaps they are a classic case of medical fraud amelioration. But is this the place to cogently worry about such issues? The idea that purer capitalism will make health care markets optimal is facile without some deeper philosophical discussion about medical ethics. Or as the book says "We do not want to reduce the qualitative aspects of life to a purely and nakedly economic situation."

Speaking of facile, thinking that blockchains will be fundamental in curing the deep problems of scientific publishing is nonsense. That problem was specifically targeted and completely cured in 1989 with a brilliant invention called the World Wide Web. And yet, astonishingly, scientific publication seems to be the last obvious application to be tentatively migrated to the web. I fail to see how blockchains will somehow overcome the scientific community's inability to use their own technologies. (Disclaimer - I work in a university research lab.)

I was actually hoping that this book would have a good _technical_ introduction to blockchain technology without going into actual coding (the O'Reilly SSH book is a good example of that) but this book had almost nothing of value in that respect.

Although the technical details of blockchains, remain somewhat vague in my mind I did learn that Bitcoin uses elliptical curve cryptography. I'm no expert but on November 6, 2013, Bruce Schneier wrote, "I strongly believe that the NSA has a significant advantage in breaking ECC." Not exactly inspiring confidence. But let's assume this is an implementation detail which will be ironed out in the glorious blockchain technologies that emerge on solid cryptographic principles. The same solid fundamental cryptographic principles which make PGP such a broad success with everyone you ever email. You're all using PGP and having key exchange parties, right?

Though this book was mostly dreamy cheerleading, there was a tiny bit of circumspection. The Mt.Gox fiasco was begrudgingly mentioned with the understanding that such a fate is not inevitable. In fact, "Other self-regulating industries include movies, video games, and comic books." That's certainly not very strong. First of all, I truly hate to mention it but there is a despicable movie industry involving children that isn't so good about self-regulating. Of course the main industries which can't be trusted to self-regulate, (or correctly, can be trusted to *not* self-regulate) are banks and other industries that handle other people's money.

The book ends with pure speculative Kurzweilian science fiction. "For example, if you are an AI or a digitally uploaded human mindfile, smart contracts could possibly..." And (spoiler alert) "Even beyond conceiving of blockchain technology as a core infrastructural element to scale the future of human progress, ultimately it might be a tool for increasing the information resolution of the universe." It's not completely inconceivable that the singularity could come from blockchain technology (obviously since this book conceives it). However, after reading this book, the idea still seems frivolous to speculate about.

At the end of the day, money is about trust. Whether it's your country's central bank or Mt.Gox, the flavor of that trust tastes the same. This book tastes like Kool-Aid.

I'm sorry, but save your money. Seriously, the first two chapters may be worthwhile, but after that the book completely degenerates and never at any point recovers. It becomes endlessly repetitive, seemingly forgetting it has only just three, four, maybe 10 sentences back written almost the exact same sentence. The effects of caffeine are everywhere: it just gushes orgasmic desire for the blockchain and everything imaginable in the universe it will eventually touch 'transform, effect, change every conceivable dimension of our economic, social, and political lives...'. Really, this is the main problem: its incredibly grating and irritating to read, becomes, really, the perfect representative of what wrong with these 'innovations' and the groups that produce them and why we should be wary. For that, its worth reading I guess, as a case-study in its own right.

On the other hand there is the incredibly poor research that the book is based on. Posts in chatrooms and at the bottom of some blog count for the author as substance enough to expound on the great potentials already being worked out in the blockchain community. Fair enough, this kind of research will save you the time of browsing a few websites yourself; the problem, though, is that the author seems to make the subtle leap from the sometimes interesting content of these internet-comments to deducing broad academic significance of them and elaborating them in an academic language that seems to establish their significance as already accepted(Deleuze and Heidegger get mentioned a couple times, strangely). That, unfortunately is far from the truth and what you end-up with is an endlessly recurring confrontation with the naivete of the author and or their ignorance of what should count as real research on a topic and or their attempt to evangelize something in a revolutionary language in order to drum-up interest, all integrity put aside. And that's also the problem I see in this space generally: one 'white-paper' after another, another long 'logical analysis' of the security of a 'coin' decomposing into increasingly complex system of conditional 'proofs' relying on nothing more than basic natural language for their establishment. Too much of it is amateurs simulating professionalism or ignorance masquerading as intelligence..

Anyway, apologies for my rant. I think this stuff is interesting, the blockchain, etc. But this book doesn't amount to much more than a collection of notes that would probably, if properly edited, fit on a single sheet of paper front and maybe back.

I searched through Amazon.com for a book about blockchain and chose this one because it was published by O'Reilly, which for me was (no longer) synonym with well-written books containing clear technical information. What a disappointment! The book is a long rant full of speculative ideas, which reminded me of George Gilder's writings at the time of the infamous tech stocks bubble. Enthusiastic, almost delirious, the author endorses any crazy notion, seemingly oblivious to the fact that after all these years bitcoin can still do only seven (!) transactions per second at the cost of $15 million per day). My favorite example is the idiotic notion that a Guaranteed Basic Income (an idea that has no relation to blockchain) would create enhanced "cognitive focus". I normally do not write reviews for Amazon.com but I wrote this one because the book is a fraud and my image of O'Reilly has been irreversibly damaged. After reading the book I looked at the reviews and the very first one expressed views exactly like my own.

Blockchain: Blueprint for a New Economy is an intermediate to advanced level book on the blockchain’s applications across a variety of sectors. It is written by Melanie Swan, a science and technology innovator and philosopher who is also the founder of the Institute for Blockchain Studies.

The book is fairly current, as if it was finished yesterday, and I must assume that the publisher O’Reilly has been collapsing the time it takes from final manuscript to market availability. Of course, that would be the minimum needed in the fast pace cryptocurrency space where even dog year speed is perceived to be slow.

Overall, this is rather short book (100 effective pages) , but don’t be fooled; it contains some dense reading, and you’ll be left with an excellent reference guide for a lot of the players and actors in this space. This isn’t an entry-level book, so if you aren’t already familiar with basic concepts related to cryptocurrency and the Bitcoin space, then I suggest starting with The Age of Cryptocurrency which I have recently reviewed.

“The potential benefits of the blockchain are more than just economic — they extend into political, humanitarian, social, and scientific domains — and the technological capacity of the blockchain is already being harnessed by specific groups to address real-world problems.”
The book starts with a long Preface that reads like a philosophical essay on the future of the blockchain, and the main chapters of the book are:

Blockchain 1.0: Currency
Blockchain 2.0: Contracts
Blockchain 3.0: Justice Applications
Blockchain 4.0: Efficiency and Coordination Applications
Advanced Concepts
Limitations

The book is an alphabet soup on bitcoin, the blockchain, and cryptocurrency; and it will definitely open-up your imagination to what’s possible. It’s a realistic book, but the realizations outlined may take 5-10 years to fully materialize. That’s OK, because I believe the cryptocurrency technological cycle is going to be a long one [ref: The Carlota Perez Factor]. The book is mostly free of hype, and I like that. I’ve already expressed the hope we stay grounded in reality as far as the Bitcoin ecosystem is concerned.

“The blockchain is fundamentally a new paradigm for organizing activity with less friction and more efficiency, and at much greater scale than current paradigms.”
True, “activity” is a good way to think generically about a blockchain’s atomic unit movement, and the “value” factor is also part of that equation. The book does covers the blockchain’s role in value creation, storage, attribution, transfer, and appreciation.

“Bitcoin is the instantiation of decentralization as a digital currency, but decentralization could be instantiated in many ways, such as smart property, delegate democracy governance services, and community-based credit bureaus. In short, we start to see the world of possibility, or the world as possibility, as French philosopher Deleuze would say.”
I had recently been exposed to Gilles Deleuze via another book that mentioned him extensively, and have recently become fascinated by his work, but enough on that digression. Definitely, you can’t talk blockchain without understanding the decentralization ramifications, but I think we have just begun to scratch the surface on this topic.

On the critiquing side, the book was light on outlining the “business model challenges” that the blockchain faces, which I think is an important consideration, given that great technology alone doesn’t get widely adopted unless we can figure out how it fits with the current business reality (although sometimes we need to invent a new reality and throw out the old one).

And in light of the exhaustive list of blockchain applications that are described; what is currently being done, what’s possible, and what we are only dreaming is all blended together; so it all may appear confusing or overwhelming. Unless you’re really into the space, you may not be able to separate the factual from aspirational parts of where the blockchain applications can go. But that may not be that relevant, because the book sparks the imagination rightfully so, at so many levels, and the exhaustive list and accounts of blockchain applications that are enumerated make-up for that minor shortcoming. As the title indicates, it is a “blueprint” after all, not a guide, so you’ll have to put the pieces of the puzzle together yourself.

Now we have a trilogy of cryptocurrency related books that I’m recommending. If you’re a developer, read Andreas Antonopoulos book, Mastering Bitcoin: Unlocking Digital Cryptocurrencies. If you’re a consumer that is starting out, read The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order. But if you are a business oriented entrepreneur, executive, investor or visionary, then this book will hopefully give you many ideas for how you might like to get involved.

I am new to the blockchain and bought this, after reading the reviews, because I thought it would provide me with a framework that would allow me to dig deeper. The book did that, listing the players in the market (some of the links have vanished) with a little context, potential uses of the technology (the appendix provides a comprehensive list of practical applications), and some of the thinking of the community.

One of the eye-opening things for me was the possibility of autonomous code running outside the framework of national jurisdictions and regulatory bodies. Distributed autonomous code (!), distributed autonomous corporations (!?) and distributed autonomous societies (???) are all built on the principle of 'smart contracts' - pieces of code that have defined triggers and precise outcomes. Having been in business for 34 years, I approach smart contracts with considerable skepticism: there are always 'gotchas' that need to be considered should they arise, and most aspects of business aren't going to be reduced to a finite state machine any time soon or probably ever. Nevertheless, this was the kind of thing I hoped to find in this book.

Having read the reviews, I expected the author to go over the top. She exceeded my expectations. I can't recall any author who has made more sweeping claims for an emerging technology. She envisions self-owning cars (not self-driving cars) and mindfiles that contain your thoughts and emotions that are uploaded into the cloud. She imagines smart contracts as the way to protect the rights of those mindfiles in their digital ecosystem, and talks about distributed autonomous societies, as mentioned above. She touches on man/machine hybrids and references science fiction books to support cautions she raises regarding the perils of autonomous code. She concludes the book by claiming that blockchain can increase the information resolution of the universe, as if this is the highest good imaginable. All of this facilitated by blockchain! But it's not really blockchain she's focused on, but a commonly accessible, immutable database that is transnationally distributed and maintained by unspecified incentives. 'Blueprint for a new economy' this is not.

The weaknesses of blockchain per se and the operational challenges of scale are not balanced against the benefits she envisions, although some of these do get a mention in passing. I would have liked to see more thoughtful consideration of whether a '51% attack' is more or less likely over time and the consequences if cryptography were to be compromised at some point. Also, a discussion of the (tremendous) resources required to mine blocks and the environmental impact of doing so. Finally, if blockchain catches on and enables transactions on the order of a few cents, the scale of today's infrastructure will be tiny compared to what will be required in the future not only to update the blockchain but to query it. Who will maintain that, how will it be federated (to avoid a 51% attack) and what incentives will support that?

The book was not well served by the science fiction. At the least, those musings should have been placed in an appendix rather than sprinkled about. The space this would have freed up would have been better dedicated to providing more context about the players in the industry today and their strategies. Reading this book, you will have their names and a sense of their mission, but you'll need to go the their websites to understand what makes their businesses tick.

It's lightweight. Read the Princeton Bitcoin Book from Arvind Narayanan instead.

If you know anything about blockchain you already know more than this book. Extremely general descriptions of what might be possible with blockchain.

Badly formatted, with no real content.

Regret buying it. No technical content at all, just speculation.

Its all speculation and conjecture. I was hoping for some technical information.