“The Business Blockchain” by William Mougayar

Amazon link

Bitcoin emerged on the scene in 2009, the first digital currency to achieve lift-off. Satoshi Nakamoto's brilliant innovation was to make the transaction the central concept. The Blockchain is a complete record of every Bitcoin transaction ever carried out. The wallet containing ‘your Bitcoins’ is a secondary construct, computed from scanning the public Blockchain on the Internet and adding up all the ‘unspent transaction outputs’ which have one of your Bitcoin addresses as a recipient.

The Blockchain is public, duplicated on all full Bitcoin nodes (i.e. computers), and the transactions, organised in blocks, are unencrypted. Yet transactions are still sufficiently secure and anonymous – the architecture and protocol design to accomplish this is both complex and amazing. It soon occurred to people that the Blockchain concept could be repurposed to support other services across the public Internet: the management of contracts, the administration of digital identity, healthcare records.

Just as the public Internet spawned private Intranets and business-ecosystem Extranets, Blockchain technology has begun to interest companies looking to exploit a robust, decentralised ‘smart database’ function internally, or with their customers/suppliers. We are in the earliest days of this new network technology and many, even basic, questions of architecture, design, implementation and operation are deeply unclear. It’s timely then, to have a book explaining the ‘Business Blockchain’.

Chapter 1 of William Mougayar’s book aims to explain what the Blockchain is all about. He uses a great many metaphors intermixed with appropriate tech buzz-words, but I don’t think the reader will be much the wiser after reading it. Saying endlessly that the Blockchain is like a decentralised database, like a shared accounting ledger, like a transaction platform, it’s a peer-to-peer network and a trust services layer is all sort of true, but leaves the reader ignorant as to how the Blockchain manages to accomplish all these marvels. It was at this point, I decided to read Andreas M. Antonopoulos's excellent “Mastering Bitcoin: Unlocking Digital Cryptocurrencies” which made everything a lot clearer (the book is accessible to non-developers).

Chapter 2 focuses on the Blockchain’s role in distributing trust. In Bitcoin, trust is about ensuring that someone who pays you has a right to the Bitcoin they’re sending you, and that they can’t spend that amount twice. There are specific mechanisms involving digital certificates and the Blockchain mining protocols (producing ‘confirmations’) which implement the trust relationship. The author doesn’t engage with these issues, however. Instead we get lots of cotton wool marketing speak, essentially hand-wavy boosterism for how wonderful the Blockchain model is, leading to further and rather vague excitement about Ethereum-style smart contracts (no details). The ratio of useful-ideas to words-expended is particularly low in this chapter.

Chapter 3 is a simple ‘innovator’s dilemma’ style essay on Blockchain acceptance. We are in the earliest stages of take-up, mostly because Blockchain architectures and implementations are very new and there are plainly many issues in adapting these ideas to other application areas, and up-scaling the platforms. This is entirely normal – most new technologies go through a phase where the technical guys have to link up with the business strategy guys to research possible new solutions. I think I just summarised that chapter.

Chapter 4 is entitled, ‘Blockchain in Financial Services’ and starts with an overview of the Banking and Financial Services industries’ responses to the Internet (less than impressive). There then follows a list of financial services where you could imagine Blockchain technologies having an impact with a few summary examples of exploratory prototypes. Regulation is correctly identified as a major constraint for Blockchain-type architectures. The chapter ends with a little more boosterism, although the truth is that all major financial institutions have already set up task forces to research this area. As before, there is no real content to this chapter.

The short chapter 5 looks at some more far-out examples of Blockchain-powered applications, specifically the ‘Distributed Autonomous Organisation’ (DAO) based on smart contracts and pioneered by Ethereum: again, very hand-wavy and speculative, with no depth.

Chapter 6, ‘Implementing Blockchain technology’, advises your organisation to appoint a “Blockchain Czar” to get things moving, and then lists all the requirements for a successful software project - which would apply to any new development programme: statements of the blindingly obvious, really.

The final chapter, ‘Decentralization as the way forward’, is an unashamedly utopian vision of 2025, when Blockchain-powered, decentralised crypto-services will have transformed the world.

No they won’t.

In summary, this book is superficial boosterism expressed in crass marketing-speak. The reader, far from being enlightened, will end up more confused than ever. My advice is to find a text which explains – in conceptual outline – how the Blockchain (and its main application, Bitcoin) actually works (Wikipedia is not bad). You will then be in a position to assess whether this model has any application for your business. Unless you are a disruptive, entrepreneurial innovator or a company operating in a specialist niche, you will probably correctly conclude that it is too early to tell. Ask the strategy guys to keep an eye on it. And save your money on this book.

Go Geth Ethereum

Amazon link

I was enrolled into the Amazon Vine programme back in 2008 (Amazon post a list of stuff they want reviewed tailored to your interests, you choose an item, they send it to you for free, you review it). In the old days there was a monthly email but that, for some reason, got discontinued. I assumed the Vine scheme had lapsed.

Still, you continue to get personal kudos, even on reviews for products you paid good money for.

But Vine is not dead - you merely have to hunt a bit for the obscured product page. Most of my items there seemed bizarre: Mills and Boon style romances, children's books, iPhone covers .. but there was one which looked tolerably interesting and I selected it, half-thinking to test whether Vine was still working for me.

"The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology" by William Mougayar  (Author), Vitalik Buterin (Foreword), arrived yesterday afternoon.

Vitalik Buterin is a 22 year old wunderkind and a founder of Bitcoin and Ethereum.

Ethereum? I knew I had heard something about that recently. I vaguely recalled it was 'bitcoin on steroids', a blockchain with added scripting language which had been hacked! Since the code was meant to be authoritative, no-one knew what to do about that at the time.

Synchronicity. SSC pointed to this breathless tech-journalism and I was transported back to the land of Neal Stephenson: 'Snow Crash' and 'Cryptonomicon'.

"It’s 4am and I’m sitting in a hotel room in Shanghai, China. The second ever Ethereum developers conference is set to kick off in a few hours. The time-zone shift woke me up early, and I’m sitting in my bed playing with my newly modded phone. The Chinese government censors most large American mobile apps behind something colloquially referred to as “The Great Firewall” so you need to use all of these shoddily made, Chinese government approved, replacement apps instead.

"The preferred app for messaging is an app called WeChat, a bizarre Slack / Venmo / Tinder hybrid that 800 million people use to communicate every day. We have a group chatroom for the conference going, which I’m scrolling through when my phone buzzes. Someone posted a new message. “The Ethereum network is under attack”.

"Ethereum is this insane thing going on in the tech world right now. It’s a new cryptocurrency that is picking up the pieces of the fractured Bitcoin ecosystem and trying to succeed in accomplishing what Bitcoin has failed to do, deliver the first batch of successful consumer applications built on top of blockchain technology. You can think of Bitcoin a bit like a shared google doc spreadsheet that anyone in the world can send data to, one global ledger of accounts and balances. Ethereum builds on this idea by providing a mechanism for users to add custom formulas into the cells.

"Anyone who has done any kind of Microsoft Excel programming knows how powerful spreadsheets can become with just a few simple formulas. Ethereum is the first working implementation of programmable money, a simple concept that may one day bring the entire global financial system to it’s knees. And it draws brilliant people from all walks of life into its orbit.

The 4AM attack on the network is bizarre in that it’s not really a malicious hack, but more like comical mischief. Ethereum runs as a distributed system. At any given time, there will be thousands of separate computers (also called nodes) running the Ethereum protocol and keeping the network online. The actual software that the computers use to run the Ethereum protocol comes in many different flavors, the most popular one is an application called Geth, written in Google’s Go programming language. 85% of all Ethereum nodes are running Geth at the time.

"The attack pushes a piece of data onto the blockchain that exploits a bug in the Geth software causing the program to crash. Because every live node syncs the latest version of the blockchain in real-time, just like that 85% of the Ethereum network goes offline. Some developers are able to respond by switching over to the Parity Ethereum client, a new client written in the high-performant Rust Language that is currently gaining market share, but for others switching over to Parity is too risky without having time to run extensive testing. The Ethereum network is essentially frozen until an update can be pushed to Geth.

"The main developers of Geth are asleep in Shanghai. They might not even have their laptops with them, as it’s risky to take your work computer into mainland China if it contains any sensitive information. They’re also scheduled to go on stage and give a presentation in a couple hours. When they wake up, do they fix the bug and miss their talk or go onto the stage? Like I said, comical mischief."

And so it continues.

I can hardly wait. My review should be up in a week or so.

More.