Out of the Ether: The Amazing Story of Ethereum and the $55 Million Heist that Almost Destroyed It All

by Matthew Leising

Discover how $55 million in cryptocurrency vanished in one of the most bizarre thefts in history

Out of the Ether: The Amazing Story of Ethereum and the $55 Million Heist that Almost Destroyed It All tells the astonishing tale of the disappearance of $55 million worth of the cryptocurrency ether in June 2016. It also chronicles the creation of the Ethereum blockchain from the mind of inventor Vitalik Buterin to the ragtag group of people he assembled around him to build the second-largest crypto universe after Bitcoin.

Celebrated journalist and author Matthew Leising tells the full story of one of the most incredible chapters in cryptocurrency history. He covers the aftermath of the heist as well, explaining the extreme lengths the victims of the theft and the creators of Ethereum went to in order to try and limit the damage. The book covers:

The creation of Ethereum
An explanation of the nature of blockchain and cryptocurrency
The activities of a colorful cast of hackers, coders, investors, and thieves
Perfect for anyone with even a passing interest in the world of modern fintech or daring electronic heists, Out of the Ether is a story of genius and greed that’s so incredible you may just choose not to believe it.

Genres: Nonfiction, History, Business, Technology, Audiobook, True Crime, Finance

336 pages, Hardcover

First published August 18, 2020

Reviews

[Murtaza · Rating 3 out of 5]

Well-written background on the founding of Ethereum and its creator Vitalik Buterin. Ethereum seeks to be something like a global internet and was the first major attempt to use blockchain technology for something other than currency. Different platforms can be built on the Ethereum protocol, each with their own native currency, or "utility token", and fulfilling different functions. This opens the door for the first time to an entirely different type of economy, with its own forms of rewards and incentives outside of the official cash nexus. Incredibly enough Buterin started to get the ball rolling on coding this as a teenager.

There is a lot of inside baseball about the relations between the different Ethereum founders, including Charles Hoskinson who was fired and now heads a competitor platform known as Cardano. The mystery behind the DAO hack is woven throughout the narrative, but to be honest it didn't hold my interest across the entire book. Effectively its likely that they know who did it but that its not revealed to the public at present. It was cool to me personally to see how much of Ethereum's origins tie back to my hometown of Toronto. There were many familiar places in this book.

[Stephen · Rating 4 out of 5]

While reading this detailed and engrossing account of the development of Ethereum, and the criminal events that led to the splitting off of Ethereum Classic, it's hard to escape the feeling that the author has a tremendous bias towards the Ethereum approach to blockchain technology over simpler approaches to decentralization like Bitcoin. Throughout, I had the sense of being preached to by a true ETH believer about the gospel of Vitalik Buterin, humankind's salvation from the middleman. Still, the storytelling gives a very kinetic sense of action to a digital heist that proves Leising's account to be more than simply a blind endorsement of the smart contract revolution.

I learned a great deal about the governance structure and technical details of a technology that I'll admit I have some reservations about. I remain unconvinced that decentralization, without regulation, is truly the force for economic equality that it claims to be. But ideals behind the movement, which I was cynical about before, come across as far more sincerely held by the architects of these systems in context. The stories told in this book, of the dedication that Ethereum's many progenitors had to building and promoting such an ambitious project, make them seem like a lot more than just opportunistic rich guys running a really solid Ponzi scheme.

Entertaining and informative, with technical concepts made immensely accessible to a non-computer scientist, this is a great window into the world of crypto through the vehicle of an exciting true crime story, even if it's clear that Leising is chugging the ETH Kool-Aid.

[Rootul · Rating 5 out of 5]

This covers a lot of the same events as "The Infinite Machine: How an Army of Crypto-hackers Is Building the Next Internet with Ethereum".

Takeaways from this book:
- It seems likely that the author and other ppl in the Ethereum community know the actor behind the DAO attack yet haven't publicly filed accusations
- Charles Hoskinson (co-founder of Ethereum and creator of Cardano) sounds like a serial liar
- Vitalik lives frugally and donated a lot to his alma matter (Abelard School)
- There were a few power dynamics at play amongst the early Etherum cofounders
- Joe Lubin and Consensys have done a lot for Ethereum

Takeaways (not directly from this book but from recent Ethereum related podcasts):
- Read Vitalik's blog
- Read about zero knowledge proofs
- How to scale Ethereum:
1. Layer 1 scaling: Eth 2 includes sharding and proof of stake. Expect 10 - 100x improvement
2. Layer 2 scaling: Optimistic roll-ups, zero knowledge roll-ups, payment channels. Expect another 10 - 100x improvement.
- We need both strategies to be developed in parallel. Roll-ups hit mainnet sooner. They will have a multiplicative effective on ability to scale TPS.
- EIP 1559 makes Ethereum deflationary. As usage of the blockchain increases, the amount of ether burned increases. More Eth burned means a reduction supply which will likely cause an increase the price.
- The distribution of Uniswap via airdrop to any accounts that used their app seems egalitarian. Note: airdrops are taxable events
- Quadratic voting for funding public goods sounds like a promising mechanism for effective philanthropy

Format: Audible

[Seng Wee Wong · Rating 5 out of 5]

The book started off with the captivating mystery of the Ether theft case, with the author pursing the leads left behind. It was a good starting point to introduce Ethereum to the non-technical people. For some people, Ethereum may just been a tool in another get-rich-quick scheme but there is a community of people working behind the technology to pave a new way for the World Wide Web. After reading half of the book, it became obvious that transactions on the blockchain may be public, the process of uncovering the identity of the users making those transactions is convoluted.

I like that the author brings the readers through the timeline of Ethereum and details the obstacles the co-founders had to overcome to make it a resounding success. I was (not) surprised that similar to most startups, there were disputes among the co-founders. Sometimes the dispute is about the money, sometimes it's about the conflicting directions the co-founders envisioned the company to embark on. In this case, the Ethereum co-founders fought over the decision to make the Ethereum Foundation a for-profit or non-profit organisation. My opinion is that Ethereum should be a largely non-profit organisation to align with the ethos of the web3.0. Cryptocurrencies is in a very special place because users benefit from using the blockchain and at the same time contribute to the blockchain itself. You get rewarded for either mining or staking the cryptocurrency tokens. In many use cases, it's a win-win situation for both the blockchain developers as the users help to maintain the availability of the blockchain. To be very honest, I have yet to grasp the full potential of blockchain technology but I foresee a good use of cryptocurrencies as the next-generation money. I hope one day I will be able to travel freely around the world carrying no LV wallet but a digital wallet containing my BTC/ETH/Dogecoin holdings to pay for my food.

The mystery of the Ether theft is yet to be unravelled but I learnt a bit more about the web 3.0 and its community of users better. Great book for whoever wants to learn more about cryptocurrencies! No tips given for picking out the next coin that will shoot for the moon :D

[Jeroen Corthout · Rating 4 out of 5]

Another great book about people coming together to build things and attempt to change the world.

This one is not a classic rise-and-fall story, but tells the history/rise of Ethereum intertwined with the story of its biggest temporary setback/fall: the DAO's $135m heist (or even way more with current ETC prices).

Also the founding of Ethereum was highly unconventional and chaotic, as practically everyone who was interested in collaborating in the very early days was accepted as a co-founder, which led to a few much needed purges later on plus people leaving to start other projects.

It's interesting to see the struggles play out between technology prowess and greed, profit and not for profit, long term thinking and short term speculation, decentralization and centralization, ... and those struggles will probably still exist for quite a while.

Hoping for a sequel!

[Ryan · Rating 4 out of 5]

This book covers the formation of the Ethereum project -- Vitalik and the other founders, early moves to create entities like the Ethereum Foundation in Switzerland and ConsenSys, and a focus on the DAO hack. The author isn't a technical expert, but a financial journalist, and so focuses more on personalities, but does a pretty reasonable job of covering things. Unfortunately there was no actual conclusion on the DAO hack (one incorrect lead and one which was inconclusive), and because the focus was split between the founding of Ethereum and the hack, doesn't really have enough information on either. The other big flaw was the author's fairly uncritical acceptance of the utility of ethereum and smart contract systems -- there is potential, and it might work out, but nothing so far has been particularly useful, everything has been far slower than expected, and he didn't take a single example of a potential use case and really analyze it. Still, a pretty good introduction to the founding times of ethereum for most readers.

[Nzcgzmt · Rating 3 out of 5]

I am not a big fan of Bloomberg's style of journalism - an excess focus on dramatization and a much weaker focus on narrative. But the book has been disappointing because of other issues. For one, Leising does not strike me as somebody who understand technical details. The DAO hack could have been explained in a simple way, but he only made it more confusing. His understanding of how the bitcoin nodes work is also a bit off.

Additionally, it is a bad idea interlacing two timelines - one for DAO and one for the Ethereum project. DAO was a much shorter story - and Leising apparently struggled to have enough materials. On the other hand, the Ethereum project is a much bigger story. The two timeline approach did not work well.

Despite the shortcomings, the power struggles at the Ethereum foundation are very interesting and worthwhile knowing. It is also one of the few books that deal with the history of Ethereum - so it does have some scarcity value.

[Ahmad Abugosh · Rating 3 out of 5]

Probably the best history of Ethereum book out there (after reading a couple of others, I appreciate this book a lot more now).

Leising takes a complicated and slightly boring story fret with interpersonal drama about the founding of Ethereum and makes an interesting story out of it. I like how he gave a nice background into the lives of the founding team (especially Vitalik).

[Mandelbrot · Rating 3 out of 5]

TL/DR: Stories about the people, not the tech behind ETH. Interesting only for background on Vitallik Buterin (genius, autistic, bit naive but was young), Charles Hoskinson (complete fraud), Christoph Jentzsch (very uncommon combination of: German, Mormon, physics Ph.D., tech founder).

The book has 2 storylines that are told in parallel.
1) How VItallik Buterin created Ethereum, starting with his parents in Russia, upbringing, school, move to Canada, high school academic star, being an autistic weirdo and eventually meeting the right (or wrong?) people to start Ethereum.
2) The Ethereum heist known as the DAO event when US$50 million of DAO tokens were stolen by an unknown hacker.

This book is about people and their relationships, not about the technology behind Ethereum.
If you want to understand Ethereum or crypto in general it doesn't really add anything, but it gives you an impression what kind of people are behind ETH. This matters actually if you want to get involved as a dev or investor, especially considering how different the communities of ETH and its biggest competitor BTC (or other projects) are.

2 people are worth mentioning in particular. Vitallik and Chris Hoskinson who later founded Cardano.
Hoskinson is described by almost everyone who was interviewed by the author (and it sounds like he did thorough work here) as a pathological liar and psychopath. Hoskinson says he moved on and left all this behind. Maybe, or people don't really change, they just become better actors (although Hoskinson was already a pretty good actor to begin with). Hoskinson is portrait as a complete fraud and you should avoid this guy (and his latest project Cardano?)like the plague.
Vitallik is described as the typical autistic genius; real genius. He has still big influence on ETH and his thoughts probably still shape the direction in which ETH is going.

Some more interesting bits:
Vitallik was really bad at finding and selecting the right people (after Hoskinson left already).
First they wanted André Laperrière as chairman.
“ Laperrière had an impressive resume, including work for the International Criminal Court, the World Health Organization, and UNICEF.”
Oh fuck some bureaucrat bullshitter in search for a job. Why not hire government people right away?
Then they selected Ming Chan.
“For Vitalik, Ming Chan made the biggest impression. “I remember being very impressed with Ming because she was the kind of person I could have a three-hour conversation with and enjoy it,” he said. Gav and Jeff, however, weren't on board with Ming and found her unimpressive.”
Hmm, someone you can have a conversation with is maybe not the best leader.
They hired her, fired her, and then Vitallik decided he wanted to keep her. Fighting between board members and the chairman starts immediately.
“After months of searching and a public call for submissions for the board and executive director positions, after in-person interviews and negotiations, the Ethereum Foundation professional board – the one that would take the group to the next polished level – had been blown apart in less than two days. This wasn't another bump in the Ethereum road. This was the road.”
Ming seems to be at least qualified:
“A graduate of MIT, where she'd studied computer science and media arts and sciences, Ming had been born in Switzerland to Chinese parents. Her family moved to Michigan, and Ming had worked for the University of Michigan from 2007 to 2015, where she helped the school maintain web content dedicated to Chinese art, history, and culture. Her first task as head of the Ethereum Foundation staff was to cut costs, which were out of control.”

Christoph Jentzsch, Mormons in Eastern Germany, create of the infamous DAO and tech founder.
“he came from a large, stable family. The Jentzsch clan had lived in the Mittweida area since the 1500s. His parents have 36 grandchildren. Christoph also had a strong connection to his Mormon faith. His grandfather had brought the religion to Mittweida when he'd started the first Church of Jesus Christ of Latter-day Saints in the small town.”
Physics PhD, 7 children now. His company was bought but still works in his offices in Mittweida with ~50 employees.

[mag]

I found the heist stuff secondary to the story of ether and vitalik. That’s where my interests lied so it makes since. The books not bad, there are some glaring grammatical errors that made me mad lol

But the conclusion was terrible. I would recommend it but at the same time I wouldn’t lol, the info can be found online

Don’t know where to stand on it....

Oh my gosh!!! I’m remembering now that at the beginning of the book, it’s like chapter 3 maybe 5 or something, the author goes into this short chapter where he describes himself more or something... I’m forgetting exactly what is was about but i remember reading it and thinking that I couldn’t take the book serious after it

[Warren Mcpherson · Rating 3 out of 5]

The history of Ethereum.
Generally well written but sometimes it seems to reach for drama.
The book reflects the discussions in the Ethereum community. There is a pretty good exploration of the DAO hack. There is some biographical detail about Vitalik Buterin. The technology development is traced from it's inception to projects that have been triggered by Ethereum.
I don't think the reader comes away with any particularly remarkable insight. But there are many people who are curious about background information that this book does a good job of covering.

[Tim Koehler · Rating 4 out of 5]

I have been involved in and following crypto since some time in 2014. Fully vested in ethereum since 2017. I am a layman who doesn’t understand the technicals behind the scenes and this book helped shed some light on the history/things going on over the years that I saw from the sidelines. The story of the ether thief was grasping for unnecessary drama in my opinion that took away from what the crypto currency needs, an easy way for non tech people to be able to use it (not just trade it). I’m excited about the future prospects and this book did help my understanding quite a bit!

[Chuck · Rating 5 out of 5]

"Out of the Ether" is a must read for anyone that wants to learn about the world of cryptocurrencies like Ethereum and Bitcoin and it is invaluable as well for those who are already students of these exciting technologies. Leising has captured the heady idealism and dazzling technological advances that are driving what will be the financial underpinnings of the 21st century. Part "Crypto for Dummies", part historical record, and part noir mystery, "Out of the Ether" will stand as a seminal text for the world of cryptoassets.

[Mario · Rating 2 out of 5]

Lot of inaccurate analogies involving coding (really inaccurate). Additionally, the whole book is supposed to be about the DAO hack, but instead gets way too involved in random offshoots describing people's personalities (my guess is the author did this since he completely lacked technical knowledge) and then he decides to skip over the founder's split because it made people feel bad. To not report something because people felt bad makes this author seem like a complete joke of a journalist. Only reason it's 2 stars instead of 1 is because at least he tried.

[William · Rating 3 out of 5]

I did enjoy the book as it gives a good background to cryptocurrency and blockchain development.

However I get that blockchain has a real value but the book made me just as determined to never invest in cryptocurrency. If you think banks are full of crooks well cryptocurrency is the Wild West.
Sometimes we need middlemen, insurance and regulations.
I still cannot shake the feeling that cryptocurrency is a big con.

[Cathal Kerins · Rating 3 out of 5]

Enjoyable read, engaging and explains on a basic level some aspects of Ethereum and how it came to be. I gave three stars for me because it is not a classic but a good book for those wanting to learn a but about how and who brought about Ethereum. Author writes a very readable and almost journalistic style that is nice. Very americanly written too I would also say. But a good book and would recommend.

[Matthew Koehler · Rating 4 out of 5]

This is the best business read for people looking to understand the crypto space. A great overview of the founding and early days of Ethereum, I walked away with a better understanding of its founders intent for the network. If you actually want to understand crypto and its potential utilities, read this before you start parroting misinformation and half truths found online. This books cuts through the noise.

[Niket Sheth · Rating 4 out of 5]

Superb story which sounds like a slow thriller. All the characters, their motivation, their role in the overall story has a good payback if the reader waits patiently till the end. It is also a good view into the future of this amazing technology. I do feel that this book and concepts discussed needs a bit of a basic understanding of the technology. Overall a good read

[Rosa Angelone · Rating 5 out of 5]

The "heist" bookends the story and the author does a good job at explaining technical detail in an engaging way. What I really loved is the deeper dive into some of the players involved. Interesting detail without being hagiographic. I have had good luck with crypto books written by Bloomberg reporters.

[Maciej Panas · Rating 5 out of 5]

Extremely informative for people (like me) who want to get Blockchain and the differences between BTC and ETH, but don't know where to start. Somewhere between a crime thriller and biography. Had a blast reading it.

[Joshua Pujol · Rating 4 out of 5]

Incredible book into the gripping stories of the early day of ethereum and the DAO smart contract hacker. The author definitely portrayed Charles Hoskinson in a very biased light but otherwise an incredible read.

[Leonard · Rating 5 out of 5]

Insightful

Answers many important questions and raises more. A good intro to crypto for people who care how we got here, where we might go next, and some of the things that can, and have gone wrong.

[Richard · Rating 3 out of 5]

I couldn't get used to the author's breathless writing style, which I found wordy and dull.

If you just want a succinct readable history of the cryptocurrency world, "The Infinite Machine" is much better.

[Ryan Manganiello · Rating 4 out of 5]

Not a bad book, and I especially like how the author points out that even after all these years, Ethereuum still doesn't have anything of value to show for itself. So in the end, it's just like Bitcoin, being used as a type of money... which is exactly what it set out not to be.

[Yanal · Rating 3 out of 5]

Interesting book on the founder of ethereum and the making of ethereum. Listened to it quickly on Audible.

[Rodrigo Herrera Itie · Rating 4 out of 5]

It’s literally another version of the infinite machine. But an interesting read.

[Paul Mashack · Rating 4 out of 5]

Well written and reported. I didn't know a lot on the subject going in, and probably won't retain much of the content from this audiobook, but still enjoyed it.

[Eddie Chua · Rating 4 out of 5]

This book to me is about 2 matters, Vitalik and of the DAO wars.

Good for someone like me who knows little and wish to understand the beginnings and development of Ethereum.

[Bryan McGinnis · Rating 4 out of 5]

Nice information to learn more about ETH formation & Vitalik Buterin & the hack causing Ethereum Classic

[Connor FitzGerald · Rating 4 out of 5]

Drawn out ending, but the story of early ETH and the DAO hack is super engaging and well-told.