Book Review: Number Go Up

Opinion

 

Number Go Up: Inside Crypto's Wild Rise and Staggering Fall
Book written by Zeke Faux 
Book reviewed by Ralph Grabowski

 

The tech industry has a fever, and it's one that can only be cured by another iPhone-like hit. As smartphone and computer sales droop, the industry is desperate for a something-anything to explode its sales, revenues, profits. 

3D TV flopped. Smartglasses flopped. VR flopped, other than in some games. 3D printing in every child's bedroom flopped. NFTs flopped. AI is flopping for the fourth time since it was conceived in the 1950s. Scooters flopped. Crypto exchanges flopped (except for, it appears, Tether). AR is flopping. Did I miss any other non-hits of the last decade? 

Technologies had been about making life easier. Most of them in my list do the opposite: they make life harder. We didn't want to have to pay for a new 3D TV having just bought our brand-new giant plasma screens, and then wear 3D glasses all the time. That was harder than keeping our giant screen and not wearing special glasses. And so on.

Bitcoin and related cryptocurrency exchanges are another failed experiment, although this one was initially tinged with the same excitement that the early days of the Internet had induced in us. True freedom! Bypass the gatekeepers! In the the case of the Internet, we bypassed mainstream media, distant libraries, and travel agents -- for free!;  in the case of Bitcoin, we could finally bypass rapacious banks with their reluctant service and inflation-inducing increases in service fees.

(For me, peak customer disdain came when Royal Bank offered to charge you $13/month if you wanted to access its services for "free," and $5/month if you wanted to access your account over the Internet. It no longer charges those fees.)

I understand Bitcoin, and even installed Bitcoin-mining software on one of my computers to get a taste of that fool's task. My fundamental problem with the technology was and is this: Where do you spend it? One of our local malls has a Bitcoin dispensing vending machine, but no store in the mall accepts the currency. The same is true for most of the rest of the world, including El Salvador, where Bitcoin was declared the second official currency but languishes through un-use. Merchants refuse it, because it is too cumbersome to process.

The design of Bitcoin ensured the value could only go up -- in theory; in practice, the value fluctuates wildly. Bitcoin is not a reserve currency, and in the end everyone still wants the US dollar. Crypto-currencies can be stolen, just as gold or paper currencies are. The energy consumption in mining new coins is crazily inefficient.

The value of Bitcoin is not an upward trajectory; the value today is 60% lower than its peak of $64,000 in late 2021

 

Anyone can create a Bitcoin-like currency, and cryptocurrency exchanges were supposed to make the imitators of Bitcoin easier to access for the common man. Some offered returns of up to 20% a year, especially enticing when central banks had pushed interest rates down to 0% and in Europe even lower. And so the common man flocked to the exchanges, and then a few years later some/many/most lost some/most/all of their life savings.

How many lost their savings? How much was lost? We don't know, because crypto-currencies are designed for privacy, and the exchanges themselves use that attribute to cloak their responsibilities with naivety. We know only about the devastation through anecdotal stories from crypto-victims. When banks collapse, the government refunds customers ($100,000 in Canada for each bank account, unlimited funds for each credit union account); when crypto exchanges collapse, not so much.

Another class of crypto-victim is humans trafficked to make their "owners" wealthy through slave-like working conditions, whether performing sex acts or scamming Westerners online. The funds that fuel this perversion of human dignity flow through crypto-currencies, especially Tether, according to author Zeke Faux.

Number Go Up is the best-written book I've read in a long time; perhaps I was fueled by schadenfreude. Faux (ironic that his name means "fake") writes a combination of documentary (what happened?), textbook (how crypto currencies work), and travelogue (hey, somebody's gotta do research in Bitcoin-haven Bermuda!).

He spends 11 hours with FTX owner Sam Bankman-Fried just prior to his arrest, stalks Tether ceo Jan van der Velde through several countries but ultimately fails to land an interview, goes through the painful process of buying (and then selling) an NFT from Bored Ape Yacht Club*.

I'm reading all this, and I'm thinking what the author is thinking: swiping a Visa card is effortless, and Visa even pays him (through points and cashback) to use the card -- the opposite of Bitcoin transactions. In my case, it's Wise, which lets me do currency transfers internationally that take five seconds to arrive and cost me $0 (for same-currency transactions). So, what's the point to Bitcoin?

With all the devastation created over the last couple of years, perhaps it should be renamed "crypt-currency."

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Number Go Up: Inside Crypto's Wild Rise and Staggering Fall
by Zeke Faux

ISBN-13: 9780593443811
Published by Crown Publishing Group
304 pages; hardcover
US$29

 

Comments

[Peter in Florida]

Sir: You state that you 'understand Bitcoin', but since i never have, I wonder if you can clarify for me what exactly is happening when a computer 'mines' bitcoins? Early on in the craze, legends circulated that the truth was that the 'mining' software was actually related to a distributed computing effort to get miner's computers to crack high-security passwords. Was this ever true, or is it "a dirty lie, and we are never going to show you our code" ? Thanks, sir