Book review “Attack of the 50 Foot Blockchain”

Almost a year ago, I reviewed the excellent book “Digital Gold” which covered the story of Bitcoin from its beginnings.

Back then I said the following:

I have absolutely no clue what a fair price of a Bitcoin might be. But I believe that in order to have value it has to be widely used and not just to speculate on an increase in value. Personally I would never “invest” in Bitcoin as for me, an investment needs to produce cashflows.

Well, this was (so far) one of my weaker calls. Back then in September 2016, Bitcoin traded slightly below 600 USD, at the time of writing, the price has went up almost fold to  4500 USD per Bitcoin (at the time of writing).

Book review: Attack of the 50 foot Blockchain

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This book is from a blogger and summarizes his view that almost everything about Bitcoin & Blockchain is garbage. Among other issues:

  • Bitcoin is a huge waste of electricity due to the “proof of work” concept
  • Bitcoin is based on ideology
  • Bitcoin is only geared towards buying, not transacting
  • No true decentralisation due to mining pool concentration which gets worse
  • it is not anonymous
  • Bitcoin is already at max capacity for transactions (very slow compared to Visa or Paypal)
  • implict fees are quite significant (micro payments might not be able to pay those fees)
  • No charge backs: Fraud made easy
  • Lots of security issues around storing the keys
  • to volatile for remittances
  • it’s easy to scam people
  • a lot of people involved in Bitcoin have questionable backgrounds
  • Bitcoin is used for illegal activities (drugs, ransom)
  • Bitcoin exchanges use crappy code
  • AltCoins and ICOs are mostly scams
  • Smart Contracts and Blockchain are only hypes

 

Summary:

Overall the book contains some interesting stories in addition to “Digital Gold” such as Ehtereum, the DAO project and blockchain, but it is not written as well. I would still recommend “Digital Gold” as best book to start and then use this book as a follow up for deeper interest.

My personal take:

The author clearly makes a good case that there are many issues with Bitcoin and current cryptocurrencies. Nevertheless I think that many of the issues can be resolved and that cryptocurrencies could develop into something useful.

However I still would not recommend to “play” the cryptocurrency market in its current form as it rather looks like a gamble without knowing the odds than an “investment”.

 

 

7 comments

  • Hi – enjoy reading your site and we’ve linked to you a number of times. I’ve noticed that you have a done a number of book reviews over the years and was wondering if you would be willing to chat about your experience with it. You should have my e-mail address. Thanks.

  • Well, from a value point of view it might or might not be a weak call of yours. Who is to tell?!

    However you can play the volatility and from a risk-reward point of view you can “invest” (gamble) with a little position. I think that currently chances are still very good that you can take chips originally spent off the table after a spike and “ride for free” after that.

    This is how I did and it worked quite well. Of course still has nothing to do with value BUT in sense of opportunity fits name of your blog anyways. :))

  • Feels like “Neuer Markt”: Bitcoin Group (A1TNV9) and Naga Group (A161NR)

    There will be a lot of tears!

  • Thanks for the writeup 🙂

  • “Well, this was (so far) one of my weaker calls. ” You’re far too harsh on yourself – that’d be like me saying it was a weak call that I didn’t play last week’s lottery with the now known numbers!

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