Blockchain Revolution by Don & Alex Tapscott… the bottom line:
I’m sure you’ve heard of the blockchain. With the success of the bitcoin and the mushrooming of crypto-currencies, everybody talks about that nowadays.
Right, but can you tell what the thing is about? Probably not. That’s normal, because the topic is complex. But you can do something about it.
So, here is a book suggestion: Blockchain Revolution by Don Tapscott and Alex Tapscott. Let me be clear here: you can’t afford to miss that book.
Is there a Blockchain Revolution out there, then? Don & Alex Tapscott think so and they do a great job explaining why. Curious? Read my book review!
Book review: Blockchain Revolution by Don Tapscott and Alex Tapscott.
Blockchain Revolution by Don and Alex Tapscott is one of those books I bought in a bundle when I decided to explore the new technologies debate that so many love to talk about these days. And I’m glad I did. Here’s why!
Innovation and new technologies have become a big thing lately, and I’ve come to realize that there are in reality two distinct discussions which both feed on one another.
There is, first of all, a general debate on how technologies will impact us in the next decades. There, the point essentially is to discuss how humans and machines will interact. Some see a future of mass unemployment. Others see potential and opportunities. But overall that part of the debate is largely about guessing what tomorrow might look like. (See my Food for Thought notes at the end of this book review for more on this discussion as there are great books to recommend if you are interested in the issue).
But a second aspect of the innovation talks rather explores the technology itself. The point here is not to guess what the future could be. It is to explain what is happening right now, and how currently happening progress is already changing our lives.
This second perspective to innovation is far more technical than the first – that’s for sure. But is it also far more practical and has the potential to surprise and fascinate you. Blockchain Revolution by Don and Alex Tapscott is part of this discussion, and it is mind-blowing. Here is my book review. Read on.
The Tapscott Blockchain Revolution: a brief overview (for starters)
As usual on I’ll Make You Think SMART, let me start with a brief book review.
Don and Alex Tapscott are experts on new technologies. Father and son, they are both recognized as sharp practitioners in their field. Don Tapscott has published nine other books on “the digital economy” 1995), on privacy protection (1997) or on wikinomics (2006 and 2010) to cite but a few. Alex Tapscott is a Blockchain and tech-savvy venture capitalist. And both did a great job.
The Tapscott (s) elaborate on what the Blockchain is and explain how it is already changing the world. The book describes a revolution quite obviously, but as the title suggest their point is to determine (help you get a clue, really) “how the technology behind the Bitcoin is changing money, business … and the world”.
For a book on complex technological developments, the style is easy-going but relatively dense. You might think about reading this book before bed, but my take is… don’t. Instead, take this book seriously, write inside it, take notes, make something out of it. This book will teach a lot to the Blockchain and Bitcoin curious, that’s for sure. But the content is so rich and eye-opening that reading it with an eye barely open would be a waste. Just saying…
Now, I’m getting into the details with a much more comprehensive book review below (keep reading!), but to finish the brief overview here is what the book says:
The Tapscott Blockchain Revolution: the comprehensive book review.
Let’s move on with a more comprehensive book review now. Blockchain Revolution is built on three parts which each explore an important aspect of the Blockchain ecosystem and formulate a variety of questions. As usual, I’ll give you the main themes and questions in bullet points before exploring them.
The book in bullet points
Don and Alex Tapscott explore these major themes:
- The block chain’s ability to change things.
- The major transformation to be expected in terms of financial services, business structures and business models, internet of things, economic integration, entrepreneurship, etc.
- The corresponding governance challenges that will need to be addressed, sooner or later.
They also ask a variety of questions, including:
- What is the Blockchain about?
- Why would it be a revolution?
- Is this a practical thing?
- What impact on the internet?
- Why is the Blockchain related to trust and what does it mean?
- How can the Blockchain impact business?
- Can it impact the society too?
- What are the implementation challenges?
- Is there any Blockchain Leadership at all?
Sounds interesting, right? Keep reading!
Blockchain Revolution – Theme #1: Understanding the Blockchain.
The book starts with a very comprehensive explanation of what the Blockchain actually is. Simply put, this book provides the basics anyone needs to start understanding the Blockchain debate.
Let’s face it! Many talk about the Bitcoin nowadays. But who actually know what it is? Very few people do. And even less know what the Blockchain (the underlying technology) is about. Hence, Don and Alex Tapscott explain the Blockchain technology through two major axes: trust creation, and standard elaboration.
A great explanation
The first chapter of the book is probably the best introduction you can get on the Blockchain.
Simply put? With the Blockchain, data will be spread around the world. It will be safe from hackable “centralized” databases. And it will be public, accessible, encrypted and incorruptible because traceable.
Even more simply? The Blockchain will create history in a form of global and ‘distributed’ recording/bookkeeping of data that cannot be altered… because unlike a central database it cannot be hacked in a single place. Practically speaking, when the network confirms that X happened the information becomes certified and traceable so that Y can now take place.
Ok, so what then?
This means that trust creation is the cornerstone of the Blockchain technology. The distribution of the process over a large network of computers means trust. And the distribution of the data means security on a constant basis because the network cannot be hacked without raising alerts.
Overall, that makes the Blockchain a “distributed ledger”. Or, in the authors’ words, the Blockchain is “kind of like a global spreadsheet or ledger, which leverages the resources of a large Peer to Peer [P2P] network [able] to verify and approve each […] transaction”.
The revolution starts from there
The authors elaborate on how the system works in great length. They explain the pillars of the technology – i.e. what we commonly mean by trust and how that reflects in internet terms. And they describe the Blockchain as a “foundation” of the future. A future based on identity protection, on a redefined notion of property and on faster / safer transactions.
Now, this bit is dense, I know. But I just summarized in a few paragraphs what Don and Alex Tapscott explain in two chapters. My goal here is to give you some hints as to what the Blockchain revolution is about before getting to the next step, but the best explanation ever is inside the book. In fact, the authors deal with these points one by one, taking an interesting ‘idea + problem + breakthrough + application’ approach so the whole explanation makes a lot of sense. If you are interested and want more, get it, it is worth your time and money.
[note to readers interested in blockchain issues: I also wrote a book review of William Mougayar’s ‘The Business Blockchain’ and described it as a fab introduction to the issue. Truth be told, Mougayar’s explanation remains more complex if you try and make a comparison. But both books are very complementary in my opinion. See my Food for Thought notes at the end of this book review for more…]
No more giants?
To Don & Alex Tapscott, this means that the systems won’t be managed by giants anymore.
Blockchain Revolution starts with a reality we all know too well. Major progress has been made with the development of the internet in terms of information, business or lifestyle. But the internet actors have failed at solving a key issue… security, or the lack of trust that of every internet user feels when it comes to data and privacy protection.
Against such a failure, the Blockchain technology could dramatically change the internet landscape. Why? Well… so far our data and privacy remain subject to the goodwill of internet giants greedy for data and opacity-based databases. But a change in internet infrastructure could help…
In line with this, Don and Alex Tapscott elaborate extensively on the key principles on which our future could be built through the Blockchain revolution.
This ideal is based on Satoshi Nakamoto’s “grand vision”, really, [Note: Nakamoto is the creator of the Bitcoin who therefore introduced the basic concept Blockchain – on which the Bitcoin is built].
And those principles are so significant that they might lead to “re-configuring our institutions and economy”. These new standards would guarantee “network integrity” by relying on a permanent consensus (confirming step X allows launching step Y). They would also allow a trust-creating process based on collaboration. Hence, whilst such collaboration was non-existent with the internet (actors wouldn’t trust each other) the Blockchain system would create an incentive for collaboration because all actors would gain from stability and expect predictability. Besides, with security would also come privacy, right preservation and enforcement mechanisms… for everyone.
Blockchain Revolution – Theme #2: The transformations to come.
The second theme explored in ‘Blockchain Revolution’ is that of transformations. This part of the book is built upon seven chapters which all provide a distinct perspective on the future. If I had to summarize the whole thing, though… I’d write that transformations will be of all kinds and amplitudes. They will impact financial services and will lead to rethinking corporate organizations. But they will also generate new business models. The Blockchain will also revolutionize the Internet as we know it. It will eventually have an impact in terms of prosperity, inclusion and small-size entrepreneurship. But it will more fundamentally impact society governance! Now, let’s dig in.
Financial services impacts
Don and Alex Tapscott’s introduction to the forthcoming impacts of the Blockchain very logically starts at the financial level.
The Tapscotts describe the current system as “a contraption of uneven developments and bizarre contradictions” and as “a machine [that] hasn’t had and an update in a while”. They see the financial world as a mix of modern technologies “welded onto ageing infrastructure”, and emphasize that the system is overall outdated. Long transfer times, complex procedures and an overall lack of access to finance for the many… not to mention regulators lagging behind a “franken-finance full of absurd contradictions [and] incongruities”.
Enough quoting, though, you get the point. The argument here is interesting nonetheless. Finance is based on “centralized” databases owned by few entities and thus remains largely vulnerable. The Blockchain, in contrast, will thanks to its peculiar structure increase security and rapidity whilst reducing risks. Trust will increase, value transfer will become possible (value, not merely money), lending and investing will be easier, etc.
Not just theoretical
The authors’ argument isn’t just theoretical. Don and Alex Tapscott back it up with examples. In fact, large financial institutions such as the NASDAQ have already started to make efforts. More systems of “permissioned Blockchains” are also being developed as independent infrastructure accessible to whoever understands the system (Ripple, Euthereum for instance).
There are many applications for this and the Tapscotts explain what is at stake very well. They also explain how the largest banks are investing into the creation of” common standards” by fear of volatility. And unsurprisingly the point also leads to discussing regulatory aspects related to systemic risks and forthcoming financial evolutions. That part of the book also discusses the future of retail banking, the idea of a worldwide ledger, the impact on at large accounting firms, the issue of Blockchain IPOS and so on. Give it a look, it is wide eye-opening.
Blockchain, Corporate & business models
The Blockchain will also have an impact on corporate models.
On the one hand, the increasing reliance on smart-contracts (action x triggers action Y automatically) will revolutionize corporate needs and structures. The role of managers will change. Transaction costs will drop, search operations will become even more easy and traceable… which means that contracting costs (the cost of doing business) will overall be reduced. Coordination will also be simplified. The cost of trust-building will be reduced considerably.
On the other hand, new business models will appear. That part of the book is very practical and quite fascinating. For instance… How could Blockchain technologies impact internet giants? What impact could this have on the users? Say, in terms of data control and privacy? Could the Blockchain allow transforming data into income automatically? Could it help managing dividend payments and ownership certificate transfers?
Well… Yes, Yes, and Yes.
In Don and Alex Tapscott’s words, “codes and algorithms could replace a layer of representatives (i.e. the Executive Board) with stakeholders exerting control over that code, nothing less than the democratization of ownership of wealth-creating instruments”. And this is already happening! Again, the authors explain this at great length, with practical examples, just give the book a read!
Blockchain and the Internet of things.
Innovation and change will also take place in relation to the Internet of Things. The ‘Internet of Things” (IoT) is a big word which describes increasingly connected objects relying on data technologies to change our lives. But Don and Alex Tapscott go to the next level. With them, the Internet of Things becomes a “Ledger of Things”, a system which makes the most of the internet by leveraging the power of the Blockchain. There, data isn’t merely transferred. it is also tracked in order to add reliability and efficiency.
Say, could we consider transforming current power grids (merely transferring energy from point A to point B) into autonomous networks capable to run themselves without human intervention and to detect anomalies? Yes. And a similar evolution would also take place in various industries. The Blockchain would basically unable smart devices to act in a predefined and trustable way. In other words, the Blockchain would “allow animation of the physical world”. How fascinating is that?
Blockchain and prosperity
Prosperity, entrepreneurship and economic integration of the poor would also be supported by the Blockchain revolution. Banks have no interest in giving access to credit to those who can’t afford it. But the Blockchain as a traceability and trust-creation tool would help record identity and would facilitate credit score-building (the validation of transactions being stored and reliable) in a standardized, transparent and large-scale way.
Hence, technology would become what Don and Alex Tapscott call a “passport” for entrepreneurship and prosperity. It would also help with the transfer and management of remittances, not to mention land ownership management where corruption is a plague (because current systems do not allow transparency and traceability. Again, read the book!
Blockchain and society
This idea leads logically to the next point – the Blockchain provides an opportunity to rebuild governments and democracy at large. Here Don and Alex Tapscott write about building a “future-proof infrastructure” for transparent governance.
They give practical examples of current and future good practices and explain at great length how the Blockchain is to become a major driver for governance improvement. A ”second era of democracy”, as they call it.
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Blockchain, culture, and all that.
Transformation, finally, would also have an impact in terms of culture. The Blockchain and its technical capacities would allow turning transparency and data book-keeping into a business model for artists (who would be able to record and trade their intellectual property right). A model taking art selling as an example is also explored together with the relationship between the Blockchain, privacy and free speech.
I found that this part of the book had less muscle than the rest. But the point made is interesting and worth a read as the ideas remain very interesting. There’s some room for another book here, perhaps?
Blockchain Revolution – Theme #3: Challenges to overcome.
Unsurprisingly, the last theme in Blockchain Revolution relates to the challenges that will need to be overcome in a close future. In particular, Don and Alex Tapscott explore very interesting implementation and leadership needs.
On the implementation side of things, they note that the Blockchain technology remains unknown to the masses. The Bitcoin is making great noise at the moment (early 2018 at the time of writing) but most people barely know about it and even less people can tell you what the Blodchain is about.
Yet, the Blockchain is the underlying technology that has maid the Bitcoin possible. Don and Alex Tapscott come to the same conclusion, but their book was published in 2016 – when the topic was even less known, that is.
In short, implementation will be a challenge.
It will be necessary to help billions “of noobs who [don’t] have the culture” absorb what the Blockchain can do for them. This capacity-building challenge is complex, and chances are that, because the technology is new and technical most people won’t see what they can get out of it … “so the obstacles are formidable” and the current Blockchain leaders will have a responsibility to make sure that the Blockchain revolution becomes a real opportunity for the many.
Then comes the issue of leadership, from a governance perspective.
There again, Don and Alex Tapscott ask a series of very interesting questions. For instance, to what extent could the Blockchain have a negative impact on workers? The related discussion with Ethereum founder Buterin is very interesting… Or, more largely, what is the impact in terms of financial and innovation governance?
The point they make is very clear and quite convincing, so I’ll go for a last quote here: “code alone is just a tool. For this technology to reach its next stage and fulfill its long-term promise, humans must lead”.
Governance will require collaboration amongst all actors and stakeholders. Because guiding and building are more important than just regulating and controlling. So, what could be the “new framework”? Get the book, the discussion is fascinating.
The main conclusions
Don and Alex Tapscott come to the following conclusions.
- The book explains what the Blockchain is, from a technical and practical point of view.
- There would be a Blockchain Revolution because the Blockchain technology is at best to go beyond the failures of the internet as we currently know it. Hence the Blockchain will create new opportunities and will lead to new ways of thinking.
- Trust was always the weak element of the internet but is a key component and feature of the Blockchain. By creating trust (through calculation processes), the Blockchain will allow skipping intermediaries and permit automation to an extent never considered before.
- This means that the Blockchain will impact business in various ways (from corporate structures to business models, etc) but also the society as a whole.
- There are however significant implementation challenges to overcome, starting with the issues of making technology accessible, setting standards and creating a form of leadership on the matter.
Food for thought!
As usual, on I’ll Make You Think SMART, I’ll finish my book review of with some Food for Thought on the book. To make things simple… I’d overall say that reading Don and Alex Tapscott’s book the ‘Blockchain Revolution’ is pretty much like reading a good science-fiction book, except this is not a science fiction book. It is a book about what the future is about to be.
The Blockchain Revolution feels like sci-fi. That’s really the feeling I had when reading the book. But this is a very practical future the Tapscotts are talking about and therefore the book is very practical and real. This book isn’t fantasy.
As I noted above, this book has two major strengths.
One, it is very good at explaining that the technology is about. Two, it is absolutely excellent at explaining how the technology will materialize and how it will change things. If the innovation discussion is of interest to you, I would also recommend another a set of books you will find relevant and interesting.
Another book on the Blockchain?
On the Blockchain itself, The Business Blockchain by William Mougayar is as already mentioned as a reference worth your time and money.
Having read both, however, I would say that the ‘Blockchain Revolution’ by Don and Alex Tapscott is more accessible, more practical. Hence, it will help you see the potential more easily.
In contrast, Mougayar’s book remains fairly technical, but it is highly relevant if you are really into the Blockchain topic and look for a way to dig in. It all depends on the level of details you seek, really. But if you do, the two books are very complementary. My book review of William Mougayar’s The Business Blockchain is available here, have a look!
More reading on technology innovation?
As I mentioned at the beginning of this book review, the Blockchain is part of a larger debate on technology revolutions. The title of Don and Alex Tapscott’s book kinda confirms this view (Blockchain Revolution, as a reminder) but this means that other discussions are also worth looking at if you are curious about technologies and innovation.
I have several books in mind here, all focusing on the so-called ‘technological revolution’, and I would recommend that you give them a look, depending on what really interests you.
For starters, The Industries of the Future by Alec Ross is a fascinating book about what tomorrow will be like. Ross mentions the Blockchain without making it his core topic, so his book is very complementary to Don and Alex Tapscott’s Blockchain Revolution. You can find my book review of Alec Ross’ The Industries of the Future here.
But more books are also worth your time. One is The Fourth Industrial Revolution by World Economic Forum Founder Klaus Schwab and it focuses mainly on the theoretical potential and opportunities brought by new technologies – with a strong governance aspect. You can find my book review of Klaus Schwab’s The Fourth Industrial Revolution here.
Another book I have in mind rather looks at the negative aspects of technologies, in terms of employment mainly. Have a look at my book review of Martin Ford’s The Rise of the Robots here.
Oh, and don’t miss Homo Deus either. It really is worth your time and money too.
For more on the topic, just have a look at my book suggestions on technology revolutions and what the future is about to be like. Again, these books aren’t directly related to Blockchain. However, the discussions are very much related to each other and you will find some similar and complementary questions and elements of answer in there. Have fun!
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Your turn now, get the book!
That’s it for now, but don’t stop here! My reading notes are meant to give you a very comprehensive overview of the books I read and some food for thought for the month. That’s why I’ll Make You Think SMART is the Kick-Ass Book Reviews blog after all!
Having said that, the next step for you is to keep digging! Remember, books are a cheap way to learn new things and to benefit from the experience of others at no cost. Not to mention the stories you’ll be able to tell after a good read!
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As always, I hope you enjoyed this book review! Please let me know what you think in the comment box down the page. Especially if you read the book, if you feel like buying it, or if you simply enjoyed my review!