Reviews

Review: The Blockchain Code, Part 7: The Hype

This is the final installation of my 7-part review of the book, The Blockchain Code, by Dave Kinsey. To read the previous installation, CLICK THIS LINK. To start at the beginning, CLICK THIS LINK. Thanks for reading!

The Hype

Click book cover to find on Amazon.

In Dave Kinsey’s book, The Blockchain Code, he gets into all the hype that surrounds Bitcoin. And I’m not exaggerating, there really is a lot of hype!

When you go on the internet to search for information about Bitcoin, usually what you find are vague, mysterious explanations accompanied by lofty language extolling the virtue of cryptocurrency. That’s the omnipresent hype that accompanies nearly all explanations of digital money. It’s the bullshit that curious researchers have grown wearily accustomed to.

Kinsey suspects that most of the people who write about or give talks about cryptocurrency have a conflict of interest. He suspects they own cryptocurrency, and that it’s in their interest that the demand for it keeps increasing, so that the price will rise higher and higher. So they’re not likely to provide a clear explanation about how it works. That could give people an idea of its pitfalls, and lead to some uncomfortable questions.

According to Kinsey, when legitimate businesses grow interested in blockchain, they often find someone in their company who already owns cryptocurrency. And that person is usually easy to identify, because they’re the one everyone sees all the time, blabbing on and on about their cryptocurrency investment, using glowing terms.

By virtue of owning it and talking about it a lot, that person is chosen by their employer to be the resident “expert.” And so they’re tasked with conducting a study, or creating a presentation, on how blockchain can be useful to the company.

However, what the corporate heads may not appreciate, is that these “experts” have a vested interest in the success of cryptocurrency. They want everyone to get just as excited about blockchain as they are, because that helps lift the price of the cryptocurrency they own. And this leads them to hyping blockchain up, while ignoring its negative aspects.

It’s true that legitimate businesses can find uses for blockchain. For instance, financial institutions are attracted to its reputation for security, and seek to use it as a way to store sensitive financial data. And medical institutions have toyed with storing medical records on a blockchain-styled system.

However, Kinsey argues that they can accomplish their goals for security in a simpler, less expensive, and probably more secure manner by sticking with a centralized database, rather than using the complex web of peer-to-peer (P2P) networking of blockchain.

Remember, the whole purpose of Bitcoin is to keep participants anonymous, and their transactions untraceable. But a financial or medical institution has identifiable owners. And their customers are also identifiable. And any data storage and data access they perform must be traceable, in order to have accountability.

Plus, much of the data is sensitive, so a P2P network of data records would still require usernames, passwords, and multi-factor authentication. And these things are anathema to blockchain. Also, by storing exact copies of records on a vast, complex, P2P system of nodes, more targets are created for hackers. The protection of the data from hackers would only be as strong as its weakest node.

Blockchain doesn’t worry about hackers viewing transactions, because it displays its data in plain sight, making hacking irrelevant and unnecessary. This is how blockchain can get away with having so many copies of its records scattered throughout the world.

Using a blockchain to store the data of a legitimate business is like trying to mix oil with water. One was not created for the other. At best, it’s a waste of money for most corporations to use blockchain. At worst, it’s a serious security risk.

Government agencies are also trying to get in on the action of blockchain. And if the idiots in charge persist with this, then sensitive government data could become more vulnerable to skilled hackers.

But Kinsey notes that there are some practical governmental uses for blockchain. The idea behind the creation of blockchain is to destroy all governments on Earth. Thus, it makes sense that the Department of Defense and intelligence agencies would take an interest in researching it, in order to defeat it.

Kinsey points out one other practical use for blockchain. He says that a blockchain-style network for whistleblowers would help protect their anonymity. To that I would add that journalists might find it useful when judges order them to reveal the identity of their sources. If their sources are on a whistleblower-style blockchain, their identities would be impossible to reveal.

Blockchain can also be useful for those living under authoritarian regimes, such as in Russia or China. It can allow anonymous and untraceable communication and transactions, and help keep dissidents out of prison.

But in free societies such as the United States, there seems to be little practical use for blockchain, for the average, everyday, law-abiding citizen. Of course, there are many uses for criminals. Especially when it comes to money laundering. But even then, blockchain comes with many hazards. Kinsey advises that you had better be an expert in it, before trying to reap the benefits from the use of this technology.

I agree. If you work for the mafia, you might find yourself wearing cement boots if you lose your boss’s money to scammers. So you’d better be very sure you know what you’re doing.

I like Dave Kinsey’s book, The Blockchain Code. It provides an objective and fairly clear explanation of this technology, and of cryptocurrency. And it’s enough of an explanation to convince me to steer clear of involving myself in it. I give this book a 4 out of 5 stars, and I highly recommend it for anyone who is interested in cryptocurrencies such as Bitcoin.

That concludes this series and book review. I hope you learned a thing or two. And thanks for reading!

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Categories: Reviews

36 replies »

  1. Probably one of the more useful proposals for blockchain is the authentication of goods, from Gucci handbags and Nike shoes to food products or pharmaceuticals. A network of participants would have some version of a shared database detailing data on the life cycle of a commodity from production to the consumer. Once added to the blockchain database, nobody would be able to remove or falsify records since it would be noticed by everyone else. Consumers or others along the supply-chain would also be able to review the data, maybe using a smartphone app, making counterfeiting very difficult.

    Liked by 3 people

  2. thanks for such a wonderful overview of blockchain technology and bitcoin.

    following on the comment from Lightness Traveling, I have a couple of students who have started a business based on blockchain technology. they are using blockchain to keep track of aircraft parts throughout the life cycle of the product. this way the airlines know the history of the parts they are using and acquiring. I believe they’ve already raised a few million dollars for their company…

    Liked by 3 people

  3. As a joke once, I added the hashtag #blockchain to a photo that I posted to instagram. I got tons of views and likes, mostly by bot accounts I suppose. Then I got added to lists of accounts that would target me with posts. I deactivated my instagram account a while back as I wasn’t really using it anymore.

    Liked by 3 people

  4. I learned what textile the Emperor’s clothes are made from, and how the tailors were so convincing of the design and quality of the garments (analogy holds up, right?). I like learning it from you rather than having to read it from Kinsey’s book, as I probably would have understood it less and cared about it less.

    Thanks!

    Liked by 3 people

  5. I like your idea about whistleblowera using it.
    Thanks for your work in explaining all this in simple enough terms that I was able to grasp….mostly. πŸ™‚ You gave the book 4 stars but I give you 5 stars 🌟 ⭐🌟🌟🌟

    Liked by 2 people

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