Blockchain is Dangerous Nonsense




Das ist die englische Version des Artikels. Er ist auch auf Deutsch verfügbar.

I’ve been concerned about the excesses of the blockchain industry and their spread into all parts of society for some time now. Here I’ve summarized my thoughts regarding the subject.

Blockchain doesn’t solve anything

Blockchain as a technology is already deeply flawed in its basic concept. This has been explained by a multitude of people, e.g. by the renowned security expert and cryptographer Bruce Schneier 1. 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 blockchain 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. 2 3 4 5 6

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 blockchains, and general inefficiency). 7

(By the way: some of the advantages promised by blockchains, but without the nonsense, is implemented by Merkle trees 8. They already exist since 1979 and blockchains build on their technology. But please don’t also start trying to use Merkle trees for stuff it’s not useful for.)

Blockchain as Universal Miracle Cure

Do you need a public blockchain? The answer is almost certainly no. A blockchain probably doesn’t solve the security problems you think it solves. The security problems it solves are probably not the ones you have.

~ Bruce Schneier 9

Sadly, it gets even worse. The main objective of blockchain is to decentralize trust and consent (even that it doesn’t do well, as explained). That doesn’t stop many people from pitching blockchain as innovative miracle solution for problems for which that’s just plain and simple nonsense.

A recent example for this insanity from here in Germany is the development of the digital vaccination certificate in early 2021. In the beginning, it was planned to use blockchain technology. In this specific case they wanted to use not only one, but five. Why? Nobody knew exactly and after massive criticism from the public the plan was dropped and replaced by a simpler architecture without blockchains, that’s still in use now. 10

Another even more recent example that regrettably hasn’t been cancelled yet is the digital report card in North Rhine-Westphalia. 11 The concept is already complete hogwash (the problem at hand is solved since decades and nobody needs a complex, inefficient and expensive blockchain for that) and very quickly after going public the project was exposed as utterly insecure, despite “security by blockchain”. 12 13

These are but two of countless projects which had blockchain tech bolted onto them without any regard for common sense. Neither I nor anybody I know has ever heard of any usage of blockchain that’s in any way useful. Blockchain is a “solution” in desperate and so far unsuccessful search for a problem to solve.

The Virulent Spread of Blockchain Tech

But why is blockchain spreading in such a staggering speed if it’s so useless? To understand the reasons for that we have to take a look at the original and still dominating use of the technology: cryptocurrencies and newer spin-offs of that, such as NFTs, DAOs and web3.

These things are useless nonsense that exists to squeeze money en masse out of people who don’t know better. Nevertheless, a massive industry has sprung up around them. This industry burns unbelievable amounts of energy, money and human work time without contributing or producing anything of value for humanity. Except for a few profiteers, of course. 14 15 16 17

From this industry stem the increasingly frequent attempts to export its core technology, the blockchain, into other sectors of life. Blockchain is being pushed into everywhere in society. This forced spread is supposed to give the blockchain industry a reason to exist apart from being a financial bubble, to give it a shine of respectability and trustworthiness and therefore pull more people into the crypto market. 18

This market is in dire need of these people and their money. It’s a pretty obvious and enormous speculative bubble — there are absolutely no real values in the whole market and it doesn’t produce any value by itself. To prevent the bubble from bursting, or to at least slow it down, and to not let the profits dry up, real money and real economy has to be pumped into the crypto market. 19

This money has to be found somewhere else. Not in the blockchain world, in the real world. And so blockchain is shilled in every last place as “modern”, “disruptive”, “innovative”, “secure” and so on. In reality, it is none of those things, as I explained. Blinded by the shine of the enormous revenues of the crypto bubble, a lot of companies and government organizations look over that. Everybody wants a piece of the tasty blockchain cake and tries to shove a little blockchain into something, anything.

Originally stoked by the blockchain industry lobby and propped up by the shine of its unbelievable profits, a enormous hype has formed. This has long since taken on a life of its own, it’s no longer just the blockchain industry that’s shilling this technology everywhere.


The spread of blockchain technology is not just infuriating nonsense, it is actively harmful and dangerous. For these reasons, we have to work against the hype by publicly exposing the absurdity of the technology and how the blockchain industry is promoting it in order to increase their profits. For the future of technology, computer science and to protect people from the predatory crypto market. I hope this article furthers this cause a little bit.




















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