Blockchain Technology is Rubbish
The term “Blockchain” is surrounded by an aura of futuristic utopianism. It has for the last half-decade been one of a few “spirit of the future” catch-phrases, along with “AI”. If you google for blockchain images your will be assaulted by a flurry of blue/black neural-network-space-fantasy animations which are produced en-masse by companies dealing in “blockchain”.
The truth is that blockchain, as a technology, is better represented by this GIF:
If you have any other option than “blockchain”, use that option instead. Blockchain technology is rubbish for 99,999% of all technical challenges. The only problem that “blockchain” may actually solve is the problem of trust — by erasing the need of a centralized actor who can manipulate the truth. The only way of solving the problem of centralized corrupted actors is by being woefully inefficient.
Why? Well because manipulating the truth has to be prohibitively expensive. So expensive that if you attempt it, you ruin yourself and become a non-entity in the future development of the chain.
Why on earth would you consider using such a ceremonious and inefficient technology such as “blockchain”? The answer is simple: you use it when you are up against enormous degrees of centralized corruption. You do not need blockchain for weed, porn or for running a world computer. It just isn’t worth it. These products are at least for the moment already delivered well enough on the market. They don’t suffer under a such overbearing centralized corruption that they become valid candidates for blockchain “disruption”.
What is corrupted beyond hope in our day and age is money. And this is why Bitcoin is the only long term interesting blockchain project out there. It was created under the hypothesis that the global central banking-industry is corrupted beyond any hope of recovery. And that people may actually think it is worth spending significant amounts of power (literally) to try and protect against the ravages of inflationism.
Blockchain is not interesting. Bitcoin is interesting. And “blockchain” is only interesting because it is a part of the Bitcoin protocol.
Bitcoin, not blockchain
Bitcoin was created specifically to solve the problem of modern money. The founder (Satoshi Nakamoto) tried to create a system where equals could communicate unhindered, without the need of a middleman. Blockchain is a central piece of this solution, but only in conjunction with several other innovations — most importantly public key cryptography and proof of work.
The genius of Satoshi was to gather these disparate innovations into the articulation we today know as “Bitcoin”. A decentralized currency with an immutable, open and transparent transaction ledger, with anonymous proof of work and a built in transaction system.
The only reason it is worth it is that central banks are robbing us, and by all accounts seem to have no intention of stopping their thievery. If central banks could behave, and could enforce strict and predictable monetary supply (such as under a strict gold standard): Bitcoin would quite simply not be worth it.
But as we can see, there is absolutely nothing that will rein in the central banks. They will print. The incentives over time are impossible to resist. And Bitcoin may prove to be a valid exit strategy.
The pundits who mouth off the familiar phrase “Bitcoin has no future, but the underlying blockchain technology may have many interesting applications” are incredibly misguided, economically illiterate, and out of touch with the technology as such. You cannot say “I don’t believe in the car, but I believe the steering wheel has a bright future”. They often view Bitcoin as if it were an uppity Silicon Valley startup. No, this is way more disruptive than the next Apple or Google or Paypal. And thank God for that.
In Bitcoin every participant has to keep tabs on the truth themselves. They must go through the entire transaction history, and verify the validity of each block (each collection of transactions). It is incredibly inefficient and slow. But it is also incredibly powerful — and so far absolutely relentless.
At this moment there are no other credible applications for blockchain technology other than Bitcoin. That doesn’t mean that Bitcoin will succeed.
It simply means that if Bitcoin doesn’t succeed: nothing else will either.
To paraphrase Andreas Antonopolous from the video below.
Bitcoin sacrifices transaction speed and efficiency and instead offers freedom, global and open access, permissionless innovation and most importantly: censorship resistance. If you are not interested in these things — there is no reason to sacrifice transaction speed.
