“Blockchain” is a buzzword much in the news these days, but most of us have only a hazy idea of what it means. This book comes as a useful corrective.
Blockchain evokes the early internet as a place of libertarian pioneering whose technology “leverages the resources of a global peer-to-peer network to ensure the integrity of the value exchanged among billions of people and devices without necessarily going through a trusted third party.” This broadly distributed, decentralized network verifies electronic transactions in blocks and serves as a natural complement to bitcoin, itself a kind of electronic currency that allows people to buy and sell things and services without, as tech innovator Sandor (How I Saw It: Analysis and Commentary on Environmental Finance (1999-2005), 2017, etc.) writes, “interference from central banks and regulators.” Whereas it took a long time for bitcoin to catch on and is still a small-scale currency relative to most of those backed by central banks and overseen by regulators, blockchain has taken off more speedily, and many banks, including Bank of New York Mellon and Northern Trust, are using blockchain technologies to manage transactions. Sandor and associates, writing at a high but not inaccessible level of both technology and economics, examine the characteristics of blockchain technologies and their applicability to electronic commerce, one of the most attractive of which is that “there is no central database to hack or shut down.” Just so, blockchain uses advanced encryption techniques to thwart malfeasance, and it requires network consensus before a transaction is considered legitimate and recorded in a vast, searchable historical archive. The upshot of its essential decentralization is that blockchain vastly reduces transaction costs—which, naturally enough, occasions resistance on the parts of those who profit from them. Comparatively frictionless transactions also encourage speed and transparency, stimulating the economy while enhancing accountability.
For the monetarily geeky crowd as well as anyone curious about how blockchain technologies function in the real world.