Blockchain as a technology is already deeply flewad in its basic concept. This has been explained by a multitude of people, e.g. by the renowned security expert and cryptographer Bruce Schneier ². So here I’ll only summarize the problems of the technology.

Blockchain tech promises to eliminate trust in central institutions. Initially this was applied to a so-called “currency” (de facto it’s a speculative commodity, not a currency): Bitcoin. Instead of entrusting centralized banks with managing numbers on accounts, Bitcoin uses a decentralized blockchain ledger for that purpose.

The idea to get rid of having to trust centralized organizations might sound tempting, but it doesn’t work: Blockchains don’t get rid of “trust”, they just change, who has to be trusted.

More precisely: The trust in institutions controlled by humans and bound by established laws and rules is instead replaced — by unconditional trust in the infallibility of code (“in code we trust” is a popular phrase in the scene). As code is written by humans, it’s seldom actually infallible.

But even if all code was without mistakes, blockchains can’t do anything against threats like scams, fraud, hacking of devices with keys for the blochain or just plain old typos in a coin transfer.

Normally, cases of fraud or mistakes could be rectified or reverted by the bank or similar institutions after a review of the situation by humans. However, in the world of blockchain there is no human supervisory authority. It is independent from banks, states and laws — which is precisely the main selling point of the whole technology.

This is proven by numerous examples from the blockchain world that feature scams, cases of fraud, hacks and plain mistakes that caused enormous damage with the victims and even the developers being entirely powerless. ^{3 4 5 6 7}

The technology has even more problems. The absolutely perverted energy usage in times of climate change is only one of those (this is mainly caused by proof-of-work, still used by all relevant public bloc