Book Review: Blockchain Basics: A Non-Technical Introduction in 25 Steps

As blockchain and, its derivative, virtual currency become ubiquitous in commerce, business and Main Street, there have been many attempts to explain what the underlying concepts are (e.g. by this author in “The Reality of Blockchain and Its Limitations, ” CPA JournalJuly 2018, this book, Blockchain Basics: A Non-Technical Introduction in 25 Stepsby Daniel Drescher, takes the reader by the familiar hand and guides them through easy-to-understand steps of how blockchain is constructed and used.

The good thing about this book is that you don’t have to read it all. The book is well divided into 25 chapters, each of which begins with a “metaphor”, followed by the use of the metaphor in a technical description. The topics are very well organized and the chapters end with a bullet point summary of the area just covered.

For example, in “Step 2” (Chapter 2), the metaphor used is buying a car, a common experience for most readers. The metaphor of a car and the underlying different types engines become the basis for the technical description by which the system in a car is layered, from the engine as the foundation, to the electrical system and driving preferences as the highest levels. The metaphor is used to describe the layers of systems in a car, and draws an equivalence to the layers in a car. payment system with an “engine” and “moving parts” that depend on the engine for power. The technical description that follows describes two types of payment systems: a centralizedwith a central ledger that records all transactions, and the other distributed, where multiple ledgers record most of the same transactions. The chapter compares the advantages and disadvantages of each approach (centralized vs. distributed) for payment systems, and then introduces new concepts, such as processing overhead and security issues. It also describes how this chapter fits in with the other chapters, or “steps” that the book will follow (a section aptly named “Outlook”).

The chapters—or steps—are organized in a consistent way, and after reading the first few introductory steps, any reader becomes more comfortable diving deeper into more detailed information. That is the power of good organization of a book, because the reader knows what to expect; although the technical summary may be new, the book makes it easy to understand by breaking down the topic and using relevant, everyday examples.

I read the book cover to cover. As a CPA with a degree in computer science, I found this volume easy to read; however, this book can also be used as a starting point for anyone who wants to understand blockchain and its application at whatever level they are comfortable with. Depending on one’s interest level, background, and available time, a reader can study this book in parts, or only up to a point, and still gain valuable, actionable knowledge.

This book has one shortcoming, which is the masking (perhaps by mistake) of the breaches and hacks that can be applied to blockchain (eg Geraldo Vasquez, “An Introduction to Blockchain: What Does it Mean for the Accounting Profession?” CPA Journal, June/July 2021, The discussion of this relatively technical concept appears at step 3, when most readers do not have all the knowledge yet. It’s a relevant topic, but I think it would have been better presented later in the book, or even as an additional chapter.

CPA Journal’s Readers can benefit from reading this book in various ways: auditors, who need to understand the underlying processes and controls of the blockchain system; CFOs, who are considering using blockchain systems such as smart contracts or supply chain databases; and financial experts, who could and should be aware of how financial transactions (both virtual currency and fiat currency) are handled in today’s marketplace.

This book was published in 2017, without the hindsight of some of the virtual currency scandals we are aware of today. As a result, this book’s approach is actually broader in scope: ledger systems, supply chain controls, and banking systems can all rely on a blockchain technology separately, and apart from, the sometimes questionable use of virtual currency.

Overall, the book receives an “A” for clarity, and a similar grade for technical accuracy.