Digital Gold: The Untold Story of Bitcoin cover

Book Reviews

This month, books about the emergence of cryptocurrencies, a ‘perfect storm’ of disruptive forces and the allure of Mars

Allen Lane

Digital Gold: The Untold Story of Bitcoin

By Nathaniel Popper, £20, ISBN 9780241180617

Cryptocurrencies are one of those tech-related subjects that have been all over the mainstream news, but which most of us would be hard pressed to actually explain beyond the idea that they’re a way of paying for things electronically without leaving a trail.

The question of how they actually work, and why they could be so important, has been largely obscured by human-interest stories about early investors in Bitcoin who only realised they’d thrown away a fortune well after the computer they’d used for transactions had gone for recycling. Not to mention the inevitable distraction of an untraceable way of doing business rapidly gaining traction in markets for things like drugs and pornography.

The idea that Bitcoins are somehow ‘stored’ on a piece of hardware is misleading, of course, and if Nathanial Popper’s account of how the currency has moved from an ideological project to storefronts around the world achieves one thing it is to clearly illustrate how this 21st century form of commerce operates.

Evidence that Bitcoin has become more than a transitory phenomenon came with this month’s news that New York has become the first US state to lay down official rules for the trade of virtual currencies, when its Department of Financial Services released ‘BitLicense’ regulations for traders who accept, sell or buy virtual currency.

Drawn up in response to the use of virtual currencies for illegal activity on underground marketplaces like the now-defunct Silk Road, and cyberattacks on exchanges, the regulations attempt to resolve issues of consumer protection, cybersecurity and prevention of money laundering. The move is an admission that attempts to ban cryptocurrencies outright - effectively trying to ban computer code - are unlikely to succeed. The way ahead is to find a way of protecting consumers and tackling fraud without hampering the innovation that’s brought us to this point.

The delicate balancing act is typical of the way in which Bitcoin, which first broke cover at an opportune time in the wake of the financial crash and loss of trust in traditional institutions, has evolved. Its development, as told in ‘Digital Gold’, is a case study of how, if you want an optimal solution to a problem, a good way to start is to toss it out to a crowd of penurious and ultra-competitive geeks with time on their hands, an appetite for solving a problem, and a grudge against the establishment.

The impetus was as much utopian as it was the desire to develop technology. US supporters tended to view Bitcoin in a libertarian way, celebrating the free market and capitalistic entrepreneurial spirit, whilst their UK counterparts saw it as an anarchist tool for taking down the government. Whatever their moral philosophy, the key figures claimed to be altruists; that many of them became extremely rich was an unexpected consequence, as was that fact that others went to prison.

The New York regulations are the result of an investigation that began two years ago, at about the same time the New York Times ran its first piece on Bitcoin by Popper. At that point the paper was unsure whether this was even something it should be covering in its financial news; the hook was the involvement of the Winklevoss twins of Facebook fame, but for weeks it was one of the paper’s best read stories.

Popper has produced a comprehensive account of the early days of what looks destined to become a new way of approaching the very nature of money.

Dominic Lenton

Public Affairs

No Ordinary Disruption: The Four Global Forces Breaking All The Trends

By Richard Dobbs, James Manyika and Jonathan Woetzel, £18.99, ISBN 9781610395793

In today’s technology business, few qualities are as sought after yet hard to attain as agility. The ability to keep up with global trends can make or break a company almost overnight, but those trends are changing faster and faster, making it ever harder to anticipate where they will go.

If one statistic illustrates this with stark clarity it’s the time that various technologies have taken from inception to being adopted by 50 million users. For radio it was 38 years, television 13 years; in this digital age social media platforms like Facebook and Twitter achieve the same penetration in a year or less.

A graphic illustrating this phenomenon is just one of many scattered through ‘No Ordinary Disruption’, an analysis of what’s happening and how organisations can respond by three directors of think-tank the McKinsey Global Institute.

Dobbs, Manykia and Woetzel speculate that the transition going on across the world right now will have an impact 3000 times greater than that of the Industrial Revolution, and that it’s down to a perfect storm of four separate disruptive forces. Each one, they say, would be among the greatest changes the global economy has witnessed; together they amount to a force that’s not just setting trends but making many of them obsolete.

None of them should in itself come as any surprise to businesses. You might not have heard of cities like Tianjin in China or Porto Algre in Brazil but well-informed executives will be well aware that these are the destinations to which the centre of economic gravity is rapidly shifting. It’s predicted that between in the next ten years, 440 urban centres in emerging economies will account for nearly half of the world’s additional GDP growth, spurring the largest mass migration from countryside to city in history.

At the same time, the lines that for so long have connected major hubs in Europe and North America are extending, creating a complex web in which Asia is becoming the world’s largest trading region and ‘south-south’ flows between emerging markets have doubled their share of global trade. Add to that the way in which the furious pace of technology breakthroughs and adoption by consumers is shortening company lifecycles, and ageing demographics that could cause the workforce to actually decline, and the stage is set for major changes.

The value ‘No Ordinary Disruption’ brings to the table is more than two decades’ worth of data from McKinsey research, pulled apart in an attempt to create a guide to where the next two decades will take us. As the authors warn, established nations tempted to rest on their laurels need to be aware that forward-looking governments and companies all over the world are adapting to these factors and taking advantage of them rather than viewing them as a threat.

Is all this relevant to anyone other than politicians, policy-?makers and CEOs? It’s tempting to dismiss as management-speak statements that we need to “reset our intuition to an era of discontinuity”or that “rear-?view thinking is no longer an option”.

For anyone not expecting to retire from work in the next couple of years though, this is a warning that we can’t expect to be able to base our understanding of the world on past experience, or even on what we know today. It may not be a case of ‘everything you know is wrong’, but if you’re not careful it soon will be.

Dominic Lenton

University of Chicago Press

Seeing Like a Rover: How Robots, Teams and Images Craft Knowledge of Mars

By Janet Vertesi, £24.50, ISBN 9780226155968

The big movie event coming up just before Christmas this year may be set a long time ago in a galaxy far, far away, but anyone interested in a more factual adventure in space that takes place in the not too distant future will be looking forward to seeing how Matt Damon gets on as an astronaut stranded on Mars in the Ridley Scott film based on Andy Weir’s novel ‘The Martian’.

Described as ‘Apollo 13 meets Cast Away’, the story adopts a theme that goes back much further even than speculative science-fiction tales of space exploration to stories of expeditions conquering uncharted parts of the world.

In real life we’ve been sending explorers to Mars for decades now, preparing the way for humans to follow one day.

When Spirit and Opportunity landed over ten years ago their task was an apparently mundane one of soil and rock analysis, but what they also did was to provide us with a host of images giving us an idea of what it would be like to stand on the surface of Mars. Even though it usually looks like the sort of desert expanse found in many places on Earth, the fact that it’s so far away has guaranteed front pages.

In ‘Seeing Like a Rover’, Janet Vertesi explains the complex process that goes into generating the photos we see on newspaper front pages. Even before every image that the Rovers take has been processed, manipulated, and interpreted, there’s hours of negotiation about what they should even be photographing in the first place.

As if that wasn’t fascinating enough, at the start of last year Nasa reported that the mission focus will move on to searching for evidence of ancient life. If we hadn’t anthropomorphised our robot emissaries enough, they’re now courageous explorers looking to answer one of the big questions.

Vertesi uses a series of events to portray this ‘uncanny intimacy’ that develops between engineers and craft. When a vehicle gets unexpectedly stuck in a sand trap millions of miles away, everyone’s engaged, working almost as hard to free it as they would if it was a human astronaut in trouble.

Ultimately, she explains, this relationship means that every picture taken by the Mars Rovers isn’t merely a picture of the planet’s surface but “a portrait of the whole Rover team, as well”.

The teams running Mars rovers on Earth are poised to temporarily break contact as the two planets enter a period in which they’re separated by the Sun. For around a fortnight the craft will stand motionless. When contact is restored at the end of June it will be less dramatic than if humans were up there, but for those involved it might be almost as nerve-racking.

Dominic Lenton

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