Student Editor Lucky Joeng reviews Blockchain Basics – A Non-Technical Introduction in 25 Steps by Daniel Drescher.
Want to know more about the technology behind cryptocurrencies? That even the Reserve Bank of Australia (RBA) is exploring use cases for central bank digital currency (CBDC)? Then this book gives lots of insight into the concepts behind blockchains.
Various industries including insurance are looking for ways to apply blockchains to their business. So, current actuaries and Student Members looking into blockchain will benefit from reading this book. Some computer science background might help you understand some computer networking concepts, but it’s not a must, as the book also introduces these concepts from the start
Daniel Drescher explains various blockchain concepts using analogies rather than mathematics. The analogies in the book helped me visualise the concepts and how it’s applied in real-world scenarios. One analogy that made me think, “I never saw it that way!”, was the difference between authorisation and authentication, which we usually see when logging onto websites. So, I learnt more than just what blockchains do, but also real-world problems and how institutions solve them.
Do I think differently after reading the book? Yes. Before reading the book, I thought blockchain was:
- Purely mathematics (specifically cryptography).
- Super technical and mathematical, so only cryptographers and programmers would understand even the basic concepts.
- Completely new idea and just appeared out of nowhere.
After reading the book, I learned that:
- Blockchain is one type of ‘digital ledger technology’ and uses cryptography for verification, authentication, etc. But the cryptography itself is only one part of the whole system.
- The mathematics and programming of cryptography itself can be complex, but the motivation behind them is simple, especially if we treat hashing like a ‘digital signature based on mathematics’.
- Blockchain didn’t just appear out of nowhere, it is a part of an evolution in ensuring data integrity and authenticity. For example, signatures and meetings in person were the older way to authenticate a user. Now, how do we do it without a physical signature or meeting in person? That’s where blockchain helps.
I highly recommend this book to actuaries and Student Members who are:
- looking for a less technical introduction to blockchain;
- picking up extra computer science skills; or
- Interested in cryptography and its application.
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