Jeff Hirsh Read: June 2022
Inspiration: As blockchain and crypto became mainstream, I wanted to understand what exactly is the underlying technology
Summary
Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.
“Bubble or Revolution?”, published in 2019 by authors and Google, Microsoft, and Facebook alumni Neel Mehta, Adi Agashe, and Parth Detroja, explores the potential and limitations of blockchain technology. The book discusses how blockchain technology, which is a distributed ledger that allows for secure and transparent record-keeping, has the potential to revolutionize a wide range of industries, including finance, supply chain management, and voting systems. However, the book also cautions that the hype around blockchain technology may be inflated, and that it is important to carefully evaluate its potential benefits and drawbacks. Mehta examines the ways in which blockchain technology is being used in different sectors, and discusses the challenges and opportunities that it presents. The book ultimately argues that while blockchain technology has the potential to bring about significant changes, it is important to approach it with a critical eye and to carefully consider its potential impacts.
Unedited Notes
Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.
Shared public ledger is the blockchain, mining is process of transaction verification—need incentives to do computational work so get new bitcoins/block rewards, crypto currency refers to encryption of information so camnot be reverse engineered, mining process requires massive computing power (macbook pro would take 2 million year with max power to verify one block), currencies require stability vs investments require growth—cannot be both and bitcoin has gone down investment path (anger if drop or stuck in range vs if currency then enjoy stuck), bitcoin can only process 3 transactions per second—wait times rise (can take hours which is not ideal for small exchanges), one btc transaction uses enough electricity to power avg american hshld for 22 days, $2,000 ASIC-powered mining rig still take 38 years for one block and reward is ~100k, mining is near perfect competition so little profit but profit if find low cost energy/rigs—profit in selling equipment to miners (e.g. gaming GPUs instead of expensive ASIC), increasingly bitcoin infra controlled by a few entities (software, hardware, mining pools), China Bitmain owns 70%+ of btc mining hardware, 80% of world’s btc mined in China, blockstream control bitcoin core software which runs 90% of bitcoin blockchain, Bitcoin Cash was a “hard fork” off bitcoin in 2017 by disgruntled Hearn who took all bitcoin prior code and pivoted to make more scalable, ethereum extends blockchain tech into smart contracts which run code to trigger on certain events/outcomes (humans can’t meddle), ethereum allows for apps and smart contracts—however poor at dealing with unexpected/contested data/refunds, forkability means all past transactions carry over to clones (nothing lost), Brave browser (from Mozilla founder) pays users to watch ads and advertiser pay publishers based on attention received (BAT tokens given out by Brave), aligns incentives as advertisers want good ads so people watch and publishers not clog site with ads so users happy, etc., crypto regulation caught flat footed and unilateral country laws simply move activity to diff country (need multilateral), also sanctioned countries explore state issued crypto to skirt sanctions, distinction b/w utility and security tokens key to regulating ICOs like stocks—howey test: if invest and led to expect profits from effort of promoter then security but if utility token then just saving money before service gets more expensive (e.g. ether as utility token to run Ethereum DApps), blockchain has potential for IoT but transaction limit makes tough (3-15 per second only), not crypto vs fiat but more like gvt can tokenize currency (mainly for behind the scenes big transfers), drawback of blockchain is it is linear but other decentralized ledger tech in progress such as tangle, private blockchains (company-specific) more use now than public blockchain—limited scope with technical goal such as supply chain efficiency and monitoring easier to implement at FB or WMT vs globally, private blockchains helps the most powerful—inverse of philosophy as public blockchain run into issues with slowness/cost/etc so requires lots of money only big corp/gvt can withstand
