This article is taken from the January/February 2021 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering three issue for just £5.

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Robin Hood. Dick Turpin. Long Ben. Bonnie and Clyde. Dillinger. There’s something appealing about those individuals who simply say, “Hand it over.” And since the days of Daniel Defoe, crime has certainly paid well for writers.

Out of the Ether: The Amazing Story of Ethereum and the $55 Million Heist that Almost Destroyed It All is indeed an amazing story but one that presents some problems for an author. This heist has no balaclavas, no molls, no fast cars, no guns, no abseiling. There’s just fingers clicking on a keyboard.

Matthew Leising, a journalist at Bloomberg, has put his back into this task. He has done some old-fashioned sleuthing, and seriously sweated in explaining the intricacies of Ethereum, currently the number two blockchain, poised just behind Bitcoin.

Ethereum is the brainchild of Vitalik Buterin, a Russian-Canadian prodigy who looks as if he was dropped off by a UFO. An early evangelist for Bitcoin, Buterin quickly realised that the blockchain could do much more than merely power a cryptocurrency. It could create a whole decentralised virtual universe, or indeed as it has become, a multiverse. The usual analogy from the faithful is that Bitcoin is like a pocket calculator while Ethereum is a top-of-the-range, Mac desktop computer.

The Ethereum protocol and its fuel or “currency”, Ether, which launched in 2015, attracted the same utopian and anarchistic dreamers who had got behind Bitcoin in its first days. Claims of justice-spread-ing and equality-boosts to the unbanked were spouted. Soon, Ethereum attracted entrepreneurs and daredevils who wanted to filthy themselves with lucre. The system almost collapsed under the weight of CryptoKitties, digital breedable “collectibles” featuring different, apparently adorable, images of cartoon cats.

You know when you encounter a lot of colourful passages about travel and weather that the writer is struggling to get to contract length with his narrative

Ethereum also attracted entrepreneurs of the felonious variety. The spine of the book deals with the “theft” in 2016 of some $55 million-worth of ether from the DAO (an autonomous corporation on Ethereum) due to a bug in its code, which almost derailed the whole project. Leising himself gets out on the road in a gonzo attempt to track down and confront the culprit or culprits.

A heist ethos is conjured up by Leising as we hop from location to location: Toronto, Miami, Zurich, Tokyo. Is he being followed? Dark figures lurk in doorways. However, Leising’s efforts can’t conceal that in terms of the crime and the hunt for the hacker, we are left with lots of clacking keyboards and log-in details.

Out of the Ether serves as a companion piece to Ben Mezrich’s Bitcoin Billionaires, which recounts the rise of the Winklevoss twins and the early history of Bitcoin. Leising too serves up a portrait of Bitcoin in its infancy as well as a detailed, perhaps too detailed, biography of Buterin, who went to an elite school where he excelled at Ancient Greek as well as maths and computer science. Through a hagiography of Buterin we get an account of the squabbles and difficulties that went into the births of Bitcoin and Ethereum. It is remarkable how the whole Crypto venture that will probably come to dominate finance was midwifed by a tiny group of people who could barely fill an average-sized restaurant. And that they had little interest in making money.

The heist laid out here is, in Crypto terms, a history lesson, a discussion of the Peleponnesian war. Things have rapidly moved on. The advent of DeFi, decentralised finance, mostly running on Ethereum, was probably not something that was at the forefront of Buterin’s thinking when he had the original inspiration.

The growth of DeFi, trading, lending, “banking’” and yield farming on blockchain is precipitous and fiendishly complicated, so much so that unless you devote yourself to it full-time you have no hope of keeping up with the pursuit of “face-melting” gains. It may be that in a decade’s time the London Stock Exchange will look as quaint and rustic as a blacksmiths’ convention.

Another rapid area of growth are NFTs (Non-Fungible Tokens), or “nifties”, basically unique or limited editions of artworks, pictures or designs (like Crypto-Kitties). The National Basketball Association now issues trading cards on the Ethereum blockchain in a series called “TopShot”.

The recent decision by PayPal to offer Bitcoin and Ethereum (in the US initially) is essentially the surrender of Wall Street. The Suits have thrown in the towel. The big Crypto exchanges like Kraken, Coinbase and Gemini are going to be absorbed into the Olympus of finance, and all the big banks like J.P. Morgan, who only two years ago were deriding Bitcoin as a scam or play money, and flicking their cigar ash at Crypto, are now scooping up the stuff. Managing and storing cryptocurrencies is fiddly (but then opening a high-street bank account or using their online banking services isn’t a laugh either). Crimes, cons and catastrophes have certainly abounded in Crypto, but in that it’s a perfect mirror of the City.

Ethereum, because of its versatility, may soon be the most powerful blockchain

Bitcoin is well on course to being a digital gold. Ethereum, however, because of its versatility may soon be the most powerful blockchain (or depending on how you look at it, already is). Its success has given it all sorts of scaling problems. “Layer two” solutions are in the works, involving esoteric terms like optimistic rollups, zk rollups and xDai.

There are a number of other blockchains (some founded by former confederates of Buterin), the socalled Ethereum-killers, but they’ve failed so far. In any case, that’s missing the point. There’s no need to dispatch Ethereum. In the future there’s plenty of cyberspace out yonder for all sorts of blockchains with their own weird terminology.

You know when you encounter a lot of colourful passages about travel and weather that the writer is struggling to get to contract length with his narrative. Out of the Ether is an excellent primer on Ethereum, but the general reader might find the minutiae a bit much. The actual crime story itself is essentially a solid magazine article that has been stretched to 260 pages. But if you have any interest in Crypto, Leising has produced a fascinating and informative read.