Ben's Book of the Month: Review of "Crypto Basics"

Posted on by Ben Rothke

Someone observed (I forget who) that he knew cryptocurrencies were overhyped when his grandmother, who had no financial expertise, said she wanted to invest in Bitcoin and Ethereum as she heard from friends and the media that it was a sure way to financial riches. While there were indeed people who became quite wealthy via these cryptocurrencies, there were plenty who lost significant amounts of money in the wake of the many cryptocurrency hypes.


Warren Buffett wisely advised investors never to invest in a business they cannot understand. Moreover, far too many people have invested in and continue to invest in cryptocurrencies when they need to understand more about how they work. And this spans the gap from grandmothers to financial analysts.


In Crypto Basics: A Nontechnical Introduction to Creating Your Own Money for Investors and Inventors (Apress publishers), author Slava Gomzin has written a guide to give readers an understanding of the fundamentals of cryptocurrencies. There is much more to cryptocurrencies than just Bitcoin, and the book fills in all those gaps.


Gomzin heads up payments and cybersecurity at Toshiba Global Commerce Solutions and is a veteran in the space. I reviewed his last book, Bitcoin for Nonmathematicians: Exploring the Foundations of Crypto Payments, here.


In this book, Gomzin gives the reader a thorough overview of the fundamentals of cryptocurrencies. After a brief introduction to cryptography, the book goes into the details of how cryptocurrencies work. While there are hundreds of cryptocurrencies, he focuses on the main ones, namely Bitcoin and Monero. And while the book has nontechnical in the title, Gomzin is an engineer through and through, and the book is somewhat technical.


Those grandmothers who liked Bitcoin but did not understand it would appreciate the book’s Bitcoin synopsis. Many people do not realize that Bitcoin is both money and a payment system. And that adds to the complexity and vulnerabilities of the Bitcoin system.


While there are many benefits to the decentralized Bitcoin architecture, it comes with several significant disadvantages. Perhaps the Achilles’ heel of Bitcoin is that it has very low scalability. And its transaction volume will never be able to match those of payment-processing companies such as Visa, MasterCard, or American Express.


With all of Bitcoin worth over a trillion dollars, there is large-scale interest in finding Bitcoin flaws and launching attacks. Even if one could craft an attack that would compromise but 1% of all Bitcoins, that would generate in excess of a billion dollars.


The book details the many types of attacks that have been launched against Bitcoin and blockchain protocols. Most of the attacks on blockchain exploit the double spending problem. Double spending is an inherent flaw in all digital cash protocols, where the same digital token can be spent more than once. And exploiting that flow can be much more than BOGO (buy one, get one); it can be buy one, get hundreds, or thousands.


Part of the book’s subtitle is Creating Your Own Money for Investors and Inventors. While doing that takes much more than just this book, Gomzin has written a book that provides a comprehensive and detailed overview of cryptocurrencies. A lot occurs under the engines of the many cryptocurrencies, and the book gives the reader a good understanding of how these work and the security issues involved.


Last year, Mark Minervini, a famous stock trader, was interviewed on the Power Lunch business news program about a stock he was enthusiastic about. When asked what the company does, he was befuddled and then tried to terminate the interview by saying the connection was not working.


For those who do not want to be embarrassed by not knowing the fundamentals of cryptocurrencies, Crypto Basics is an excellent text to help them. While they will not be an expert on the topic after reading this, it will certainly help them avoid being humiliated when the subject comes up.

Ben Rothke

Senior Information Security Manager, Tapad

Human Element Technology Infrastructure & Operations

security awareness secure payments & cryptocurrencies

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