The Book I Read: 'The Truth Machine' by Michael J. Casey and Paul Vigna
If you’re like me, you would like to think of yourself as an expert-in-the-making when it comes to cryptocurrency and blockchain technology. Maybe, you are a bit more grounded and can explain the difference between what a cryptocurrency is, and the general architecture behind it, which is blockchain. The Truth Machine by Michael J. Casey and Paul Vigna serves as a solid introduction to blockchain technology, what it is, its use cases, pitfalls and potential for society.
Before getting into an analysis of the book, a description of what a blockchain is and how it is different from cryptocurrency, a manifestation of the technology, would be appropriate.
A blockchain is essentially a decentralized and transparent ledger that cannot be changed once a transaction has taken place. The thrust behind this kind of technology is that it is more fair and direct than traditional banking, which has “middlemen” like banks that slow down the time it takes money or other goods to flow from one user to another. You can think of the blockchain as a new kind of a contract platform, whereas the cryptocurrency is what is being exchanged on this platform. Many different kinds of cryptocurrencies exist, and many rise and fall. The point being, while the value of Bitcoin might change drastically from one day to the next, the technology that facilitates transactions of Bitcoin has a more stable future. It’s not leaving any time soon.
In the book, Casey and Vigna do a great job of illustrating different use cases for the technology. One example that stood out in particular was their suggestion to decentralize the power grid in India, in response to prime minister Narendra Modi’s goal of bringing electricity to 300 million people. In their view, this can only be accomplished by decentralizing the power grid, pushing generation ownership outward to individual villages, and ushering in an age of “energy democracy.”
Another example that is often overlooked in more developing countries is the problem of being unbanked. Roughly 2 billion people throughout the world are “unbanked” or don’t have access to traditional finances, and a portion of these people are even in the U.S. (e.g. 20% of people in cities like Detroit and Miami). Individuals are penalized by their inability to prove good credit and financial standing, or pay back loans, hence perpetuating a vicious cycle of financial straits and mismanagement. Blockchain technology promises to open up new avenues of “trust” for individuals who are unbanked, so they can start to generate their own wealth.
Again, the main appeal of the blockchain is that it is a fair record keeping system. But governing this system is still up to the domain of human actors. A system that touts itself as being free from control by any individual, is still created and run by these very individuals. Ironically, a decentralized and free system like this still has to be governed by human actors.
The book spends its third chapter talking about this very issue by focusing on the trials and tribulations of Ethereum, a smart contract platform. There were clashes of personality, and buggy software architecture that needed to be fixed. In other words, the reader gained entree into a bit of an “underbelly” of this new technology. Hard decisions had to be made that hurt some but benefitted the larger system. Ultimately, many more of these decisions will have to be made in order to establish blockchain as a viable or de facto next step for exchanging currency and other kinds of contracts.
Conclusion
While I gave a very brief overview of this entire book, I would recommend anyone casually interested in blockchain or cryptocurrency to pick this up whenever possible. I thought it gave a great description of potential uses and a larger context for blockchain, while spending plenty of time on the more familiar, financial aspects of blockchain and cryptocurrency specifically.
Know anything about blockchain applications to transportation? If you do, please send a message my way! I am all ears and would be more than happy to exchange knowledge on this topic.
Until next time…cheers!
