BTRIPP (btripp) wrote,

Bleeding on the cutting edge ...

Well, here's an interesting book that came to me via's “Early Reviewers” program. I'm not sure exactly what I was expecting when I put in my request for Brian Patrick Eha's How Money Got Free: Bitcoin and the Fight for the Future of Finance (although I'm pretty sure that I wasn't expecting it to be 500 pages long – sheesh!), but I have some online friends who are big into Bitcoin, and I guess I was hoping to get up to speed on it. I also wasn't expecting this to be a narrative of a number of the major players in the Bitcoin world, their histories, their companies, and their struggles with technology, culture, and (of course) Government. If there's a unifying arc to the book, it's the story of Charlie Shrem (certainly among dozens of others), who went from a bright kid immersed in hacker (and darkweb) culture, to becoming a legit entrepreneur (and for a while spokesman for the industry), and then being brought down in legal complications, jail time, etc.

Interestingly (to me, at least), it was Shrem that first introduced me to Bitcoin … in a presentation that he and Anthony Gallippi gave at 2013 Techweek in Chicago, entitled Bitcoin for Beginners: The Currency of Change … when he was there in the role of Vice Chairman of the Bitcoin Foundation. I wish I'd taken action on it at that point (June 29, 2013) as in the intervening four years, the value of one Bitcoin has gone up more than 28x (from $95.08 then to $2,698.60 as I'm writing this). I have some vague idea that they were giving out Bitcoins to those in attendance that day, but at a hundred bucks a pop, I'm guessing I'm misremembering this (I certainly don't recall getting a “wallet” set up for it). Needless to say, 2013 was pretty much the apex of Shrem's career.

I need to confess a few things before we delve into the book … #1, I still don't have a real solid grasp on the whole “Bitcoin thing” – I have an online acquaintance who is pushing systems for “mining” Bitcoin (of some new variety), and I really don't have a mental model on how that fits in to the over-all Bitcoin environment (it was my understanding that the requirements of “mining” – once quite popular in China and other locales – had become so processor-intense that it cost so much to put together a system as to make it unproductive, but there they are) … #2, there is so much happening in this book, that I really feel lost and in need of a “scorecard” (“can't tell the players without a …”) … and #3 (no doubt due to my fiction/teaching-story aversion), I found it difficult sorting out concrete information here – resulting in my having exactly one of my little bookmarks sticking out of this very long volume. Of course, this last point also leaves me having to cherry-pick and paraphrase rather than blocking things out for you … and, given the noted “cast of dozens”, this also means that things might get a bit disjointed and less coherent than I'd like. Sorry about that!

Anyway … Bitcoin hasn't been around that long, but, in terms of tech stuff, it's been around for a considerable while. It was first announced, by its semi-mythic creator (whose true identity, I believe, has still not been discovered – although there are several players covered here who are suggested as likely), Satoshi Nakamoto, on November 1, 2008:
When a famous cryptographer … asked him to provide a detailed explanation of the Bitcoin protocol, complete with algorithms and details of the data structures involved, Satoshi said it would take less time to simply release the first version of the software. … He didn't just want to tell them it could work. He wanted to show them it would.
So, it's been less than a decade since Bitcoin's introduction, and it has been a relatively slow growing phenomena in most settings (there are niches where it's “hot”, but I doubt if one is outside of the tech or financial fields this has had a major presence on one's radar).

This provides a decent segue to a brief digression about the author. Brian Patrick Eha is a technology reporter for the industry magazine American Banker, a contributor to the New Yorker, and was a assistant editor at … which sort of gives you a perspective of where he was coming from on this project … and, perhaps, a clue as to how much of the nitty-gritty of this went right over my head. Now, don't get me wrong, How Money Got Free is an engaging read, intermittently entertaining and informative, but it's more like a rambling fact-based novel (with a Dune-like cast of characters) than a straight-out presentation of the facts on the emergence of Bitcoin. And, this is the work of a journalist (he's got a masters from Columbia's J-school), so it also has that “I'm reading the longest newspaper feature story ever!” vibe going for it, but is coming from within the environment of the story, as the book's Acknowledgments starts off with:
This book would not have been possible without Roger Ver, Charlie Shrem, Nic Cary, Barry Silbert, and other Bitcoin pioneers giving generously of their time during intense and stressful periods of their lives. It's not often one has the chance to document an unfolding revolution from the point of view of its leaders, and for that I'll always be grateful.
I also have to admit that I have now made three attempts to do a detailed review of this, and have simply not been able (especially lacking any of my bookmarks) to make any headway. So, I'm going to try to give you the broad strokes here, perhaps with bits that might jump out at me as I flip around the book. One thing that stands out is that Bitcoin took a very long time to get out of the shadow of the notorious Silk Road darknet marketplace that was launched by Ross Ulbricht in 2011. Seventy percent of what was being sold on Silk Road were drugs of various types, along with other unsavory transactions (supposedly murder-for-hire schemes, etc.), making it an unsurprising target for law enforcement. Silk Road was shut down in 2013, and Silk Road 2 in 2014. It could be argued that Silk Road only existed due to the availability of the Bitcoin system, with its total anonymity matching the Tor routing structure it operated in. Because of the illegality of most (if not all) of the sales on Silk Road, it tainted almost everything in the Bitcoin sphere, as any start-up operating with Bitcoin that supported Silk Road transactions could be seen as part of a criminal conspiracy.

Eha states:
… Bitcoin could actually be a better form of money than any that had previously existed, because it satisfied more than anything else out there some of the cardinal requirements of money: scarcity, portability, and divisibility. Weightless, Bitcoin could be transferred more easily than cash or coins; unregulated, it could be moved anywhere in the world frictionlessly, while dollars, pounds, and euros were subject to banking fees and delays; with its fixed and transparent growth rate, it enjoyed artificial scarcity; divisible to eight decimal places, it could be broken into tiny pieces and used for micropayments.
He later quotes Roger Ver (another major player in the story), an anarcho-capitalist libertarian with no love for governments, saying:
Bitcoin totally strips away the State's control over money … It takes away the vast majority of its power to tax, regulate, or control the economy in any way.
This introduces another key sub-theme of the book … the “rebel” drive of many of the early advocates of Bitcoin who saw it as a way to free money from the control of governmental tentacles. Of course, this was a bit of a pipe dream, as soon governments on every level started to try to control Bitcoin … in fact the book describes how several very useful services folded (or stopped doing business in the U.S.) because they were suddenly faced with different regulations in every state, along with an array of fees and other controls (some as onerous as imposed on the traditional banking industry), requiring compliance across a mind-boggling array of new laws. On the flip side of this, the book (towards its end) sketches out how Wall Street became involved, and even how many governments have looked into blockchain (the key data structure of Bitcoin and similar cryptocurrencies) for establishing an official cashless future.

Frankly, one of the scarier aspects of Bitcoin and its relatives is that, like cash (but less trackable), it can simply disappear, and the book goes into case after case where somebody managed to hack into one of exchanges (like Tokyo-based Mt. Gox, which in 2014 had $450,000,000.00 worth of Bitcoin go missing) and make off with vast sums. Several of these led to further investigations and accusations of assorted financial wrongdoing on the parts of those involved with various Bitcoin services. As I noted up top, I had some vague awareness of possibly having had some Bitcoin from back in 2013, but not having any record of a “wallet” – the on-line container for one's Bitcoin – it's like it never existed (which, of course, in this case is entirely possible), as opposed to, say, sticking a few hundred bucks in an envelope and then forgetting where you put it (where you could eventually find it, as it didn't cease to exist). Four hundred fifty million in cash would likely leave a transit trail, but in the case of Bitcoin, it's just gone. Needless to say, these sorts of security issues are things that will need to be addressed before blockchain-based “currencies” overtake their physical predecessors.

In any case, How Money Got Free is an interesting read. I'm humbled that I was unable to find a way to really convey the substance of it here, but it is a story featuring a constantly shifting web of characters, companies, and conflicts, and I could not find a way to do that without this review running into novella length itself.

As this just came out last month, you are likely to be able to find it in your local brick-and-mortar book stores that feature financial and or tech titles, and, of course, the online big boys have it (at this writing at a 39% discount). While I'm sure this is not “for everybody”, if you have an interest in tech, cryptography, finance, and/or libertarian concepts, I'm sure you'll find a lot of this extensive look at the story arc of Bitcoin quite fascinating.

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Tags: book review
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