Flaws in Blockchain
Whether it was pandemic boredom, or someone finally opened the lid on human excitement, blockchains have gone from obscure to mainstream in what seems instantly. No doubt its initial excitement was generated by the possibility of a system immune to government intrusion. Finally, libertarian fantasies could be carried out. Every entrepreneur in a NASA T-shirt and government bureaucrat began to twiddle at their keyboards frantic for a “unicorn” that will “go to the moon.”
The engine of the blockchain fad is that third parties can be removed from contractual transactions and in their place, technology. But what technology? Has it worked? Is it any good? By moving trust from people to computers, are we gaining more security or less? These are the questions not being earnestly asked.
The myth of blockchain guaranteeing libertarian freedoms has been debunked by the many instances of security agencies tracking every coin, like when rioters’ payments were tracked around the world after January 6th or when Wolfram Research tracked ransom payments paid by Colonial Pipeline. In fact, tracking cryptos has become big business. The fact is that everyone on the blockchain will be playing by the law. Even if you truly wished for a safe haven for criminals, those hopes have been dashed.
The myth that blockchain guarantees greater security has been debunked by the daily hacks and account lockouts that occur. Huge fortunes have been lost by hacks or simple accidents, even one of the geniuses behind Apple, Steve Wozniak, lost thousands of dollars. Not to mention the questionable life span of this technology compared to more traditional, unrustable, zero-maintenance metallic methods, like gold. Cryptocurrencies on the other hand require a sustained amount of interest and maintenance.
The myth that blockchain will fundamentally transform society has been debunked by the current state of society. If the technology was as transformative as we are meant to believe, why has nothing changed besides the price of cryptos (speculation)? We must not confuse speculative prices for success. Wouldn’t such a transformative technology be easily and immediately disruptive? Speculation it is indeed, because on what else could crypto prices be based? Cryptos being a historically volatile asset, we would be better off basing currencies off of a random S&P stock, or perhaps all of the S&P, or perhaps on all businesses, oh wait.
As long as blockchains and cryptocurrencies are the topic of discussion, they will never gain mainstream use. These technologies should be operating in the background, not the forefront of discussions regarding how we can “leverage this new technology.” More specifically, the discussion should be about how to remedy a problem or improve a situation, not about how can we insert this new technology into something that ain’t broke. Not to mention if it may cause more problems than it fixes.
The seemingly religious aspect around blockchain technology is clearly seen. Some have speculated that this is the libertarian ideology rearing its head, however, the scale of the blockchain following is of far greater proportion than that of the libertarian community alone. What we witness now is a social movement of technological progress. Wherever technology goes, progress, and therefore, Goodness will follow. This is a fad born from unfound faith in technology and its supposed ability to “progress” everything it touches. Like the excitement over flying cars in the early 20th century, or diesel cars, or augmented reality glasses, etc, sometimes it doesn’t work out that way.
While we may see some application of blockchain in the future, it is not igniting the revolution so many expected. It is even questionable if we will be talking about blockchains in a few years. The storm of hype around this new technology is not an indicator of its usefulness but instead of our misplaced faith. We should more critically think about what use we have for emerging technologies, and not simply assume every new invention will or should radically change society. Maybe the popular use of “unicorn” by blockchain acolytes is appropriate, as much of this hype is fantasy. It is not certain that blockchain will change our world, save for a few coin prices owned by the wealthy. And blockchain certainly won’t save us from having to trust each other. The greatest thing blockchain could be is a lesson in putting semi-religious loyalty into a technological fad.
