Blockchains Considered (Potentially) Harmful

The blockchain has the potential to impact society, and it is precisely the properties that make the blockchain potentially useful that also make the blockchain potentially harmful.

It’s our responsibility as technologists to inform people about the possible consequences of the adoption of the technology we develop. It’s also our responsibility to help mitigate the damage that would be caused by the technology’s adoption.

I’m writing this because I’ve been working on blockchain architecture for around 3 years and I have become very concerned about the risks that blockchains pose to society.

The blockchain space has generated a lot of hype about how it can improve the lives of its users, and how it might positively impact society. Unfortunately, on the other hand, it has produced very little discussion about the harms (accidental or deliberate) that can arise from the use and abuse of blockchain technology.


The blockchain’s security makes it a source of trust because it’s difficult for anyone to influence the blockchain. On the other hand, that same security makes it equally difficult for anyone to interfere with the blockchain to prevent harm.

I’m going to give some concrete examples to illustrate that the same properties that make the blockchain potentially useful also make it potentially dangerous.

Censorship resistance

Censorship resistance is one of the blockchain’s most important security properties. It can be an invaluable tool for people targeted by totalitarian regimes. People can communicate political speech and share logistical information that might not be possible otherwise. Censorship resistance can help keep political power in check.

On the other hand, censorship is actually important for preventing many forms of online abuse. For example, imagine if you were unable to un-tag yourself from an embarrassing photo that someone posted to Facebook without your consent. The right to be forgotten, which allows people to stop their personal information from being searchable. But this right cannot necessarily be guaranteed on a censorship resistant blockchain.

Financial freedom

By providing potentially everyone “with a Swiss bank in [their] pocket”, blockchain technology may be able to dramatically improve global financial inclusion and freedom. It will potentially allow anyone to safely save and transmit money. Ubiquitous access to financial services can help alleviate poverty on a global scale.

On the other hand, the same financial freedom can pose critical threats to a government’s ability to enforce its policy goals. Goals like tax collection, enforcing capital controls, and preventing terrorism financing may be challenged by the possible success of blockchain technology. Very notably, the US Government’s ability to enforce international economic sanctions may also be at risk.

New kinds of organizations

We are more-or-less used to organizing via legal institutions like the corporation. New kinds of organizations are becoming possible thanks to the blockchain. These organizations may use the blockchain simply as a way of communicating or transmitting money, and they also may have some of their rules enforced by the blockchain. The DAO, for example, allowed thousands of people from across the globe to pool their money together and to collectively decide what to do with it.

But this new technology may also enable organizations with nefarious goals. Cyber criminals who infect their victim’s computers with ransomware are able to accept ransom payments without fear of having their accounts shut down or their payments reverted, thanks to the blockchain. Commission-based ransomware is able to distribute commission payments to criminals within a larger network. This effectively permits new forms of criminal organization. In a similar way, dark net marketplaces have facilitated an ecosystem of new criminal enterprises. This is new enough that it’s hard to imagine how exactly criminal organizations will take advantage of the blockchain.

Moving forward

These examples only scratch the surface. I hope they can provide a starting point for a very broad conversation about the potential negative impact of blockchain technology on society.

I think this conversation is critical for the responsible and ethical deployment of blockchain technology. Being mindful of risks, of course, is not enough to mitigate them. But, it is a good starting point!

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