Reading Time: 2 minutes

My book review this week is on Michael Casey’s new book – The Truth Machine: The Blockchain and the Future of Everything. It is not a beach read, but for those who are interested in the future, it’s a well-written, understandable book on a highly complex subject written by a former Wall Street Journal reporter.

For the uninitiated, blockchain is the technology that Bitcoin (a cryptocurrency) is built on. Blockchain is a highly technical way of linking electronic pieces of data so that the data are preserved and less vulnerable to manipulation.  It is a decentralized digital ledger. Contrast that with bank ledgers. Several takeaways include:

  • According to Casey, “Blockchains are a social technology, a new blueprint for how to govern communities.” (p. 14 – 15) The social part is critical, and Casey believes that blockchain can rebuild trust in our society.
  • With the internet, we have increasingly been removing the middleman, and moving towards a peer-to-peer economy. At each stage, technology has had to adapt by providing a trust mechanism; hence, the scoring systems in tools such as Uber. This suggests that we are prepared, as a society, to increasingly move in this direction as trust issues are resolved. The blockchain may be the ultimate trust machine. (p. 7)
  • Ledgers have never been a representation of the truth, but rather, a way of getting closer to the truth. With so many people involved in creating the blockchain ledger, we get closer to the truth.
  • In a digital world, we have to choose between letting private companies control data (think about the recent Facebook problems) or we expect the government to regulate the way data are controlled (consider the Edward Snowden revelations). Blockchain offers another choice – but it requires that we reimagine the way that online data are organized. (p.39)
  • The blockchain world may be ushering in a token economy. In this economy, “we can embed into these ‘programmable’ forms of money a way to steer communities toward desired common outcomes.” (p. 93) For example, we can incentivize advertisers to provide ads that we want to see, instead of those that annoy us. In effect, we can reward people when they behave in positive ways. This could solve the problem of how we manage public resources, such as energy, water, and air.
  • Improving supply chain management is a key blockchain opportunity. Hyperledger, a venture that includes IBM, Intel, and Accenture, among others, is pursuing “nothing less than a common blockchain/ distributed ledger infrastructure for the global economy, one that’s targeted not only at finance and banking but also at the Internet of Things, supply chains, and manufacturing.” (p.167)  By extension, given blockchain’s transparency and real-time tracking, Casey sees “the potential for a worldwide system of supply chains that uses resources way more efficiently and that could radically change the trading terms of the global economy.” (p. 143)