Blockchain has no future; it's time to abandon it.

Editor's Note: This article is reprinted from InfoQ, authored by Kai Stinchcombe, translated by Wuming, original link.Link

Blockchain is nothing but a flawed technology with no future. The main reason blockchain technology hasn't seen widespread adoption is that systems built on trust, regulations, and regulatory bodies function better than the trustless institutional systems envisioned by blockchain. Blockchain started off on the wrong track, so no matter how much it progresses, it can't change that fundamental error.

Last December, I wrote an article about how blockchain cannot solve real-world problems, which received widespread attention. Most people didn't dwell on the technical debates, but instead emphasized that decentralization can bring integrity and trust.

Venmo offers free remittance services, but not for Bitcoin. Last December, after I wrote an article saying that Bitcoin had no practical use, some people stood up and said that Venmo and PayPal were profiting from users' funds, so people should switch to Bitcoin.

Clearly, there's a huge gap between the perceived uselessness of blockchain and its followers! In fact, this person wasn't a die-hard Bitcoin fanatic; he simply wanted a convenient and free way to send money, and Bitcoin happened to meet his needs. I'm sure that in reality, no one would believe that blockchain is the only solution to their problems and therefore become a die-hard follower of it.

Fewer and fewer retailers are adopting digital currencies as a payment method, and most of the biggest proponents of blockchain (such as IBM, NASDAQ, Fidelity, Swift, and Walmart) are mostly all talk and no action. Even the renowned blockchain company Ripple hasn't used blockchain technology in its products. Ripple believes that the best way to conduct international remittances is not to use Ripple.

Blockchain is a technology, not some metaphor.

Why is it that being enthusiastic about certain things is actually of little use in practice?

People have "imagined" a future for blockchain, such as its application in AI like Google or Facebook. These imaginings arise because people misunderstand blockchain. Blockchain is simply a data structure, a linear log of transactions, typically generated by the owners of computing nodes (also called miners), who are rewarded for recording transactions.

Two points are worth mentioning about this data structure. First, modifying any block will invalidate the subsequent blocks, meaning we cannot tamper with historical transactions. Second, we can only receive rewards if we are on the same chain as others, so each participant tends to reach consensus.

In the movie "The Golden Compass," dust filled the air and formed everything through consciousness, but blockchain is not like that.

We will ultimately have an authoritative historical record. Furthermore, because consensus is formed based on everyone's interests, if someone participates in fraudulent transactions, no one will receive the reward. In this way, rule-following becomes implicit, without the need for government or police intervention. This is a truly brilliant idea.

In short, blockchain is a technology that works like this: "Let's create a long list of small files, each containing the hash of the previous file, some new data, and the answer to the algorithm. If someone is willing to verify and save these files on their computer, they will be rewarded with some money."

The metaphor for blockchain is described as follows: everyone stores their records in a tamper-proof repository that does not belong to anyone else.

In 2006, Walmart launched a system to track bananas and mangoes from farm to store. They discontinued the system in 2009 because it required everyone to input data, resulting in a poor user experience. In 2017, Walmart relaunched the system using blockchain technology. If someone tells you, "Farmers don't like inputting data," how would you respond? You might say, "I know, then let's create a long list of small files, each containing the hash of the previous file." That might leave them confused, but if you say, "Let them keep their records in a tamper-proof repository that doesn't belong to anyone," they'd likely understand more easily.

Trust based on blockchain collapses in practice.

People see blockchain as "fertile ground for future integrity and honesty." By using blockchain to solve your problems, your data instantly becomes legitimate and legal. People can make anything they want legitimate and legal simply by using blockchain technology.

It is indeed difficult to tamper with data on a blockchain, but blockchain is not the most effective way to create legitimate data.

To illustrate this point, let's first look at an example before discussing the theory. Let's take a familiar blockchain application scenario as an example—purchasing ebooks through "smart" contracts. The role of blockchain here is "trust": you don't trust the ebook provider, and they don't trust you (because you are all just unknown individuals on the internet), but you both trust the transaction conducted on the blockchain.

In a traditional scenario, this might look like this: you pay and wait for delivery, but the merchant receives the money but doesn't intend to ship the goods. Your only recourse is to rely on Visa, Amazon, or the government to resolve these issues. Conversely, in a blockchain system, transactions are executed by adding records to a tamper-proof repository that doesn't belong to anyone. Whether it's a remittance or the purchase of digital products, everything is done directly, without intermediaries or the possibility of anyone profiting. Isn't this better than the traditional method?

Perhaps you're a software whiz. When the author presents you with a smart contract, you spend an hour or two ensuring that the contract only withdraws payment equivalent to the fair price of the ebook. Then, you receive the ebook, not a bunch of files.

But software auditing is rarely perfect! Even the most rigorously audited smart contracts have bugs that people often don't notice. By the time they do, a thief has already used them to steal million. Even a 0 million fund established by cryptocurrency enthusiasts can't guarantee a foolproof audit, so what makes you so confident in your ebook audit? Perhaps you should develop your own buyer's software contract—what if the ebook author hides a backdoor in their contract and uses it to steal your life savings from your Ethereum wallet?

Buying ebooks is a very complicated process! It's not that there's a lack of trust involved, it's just that you choose to trust the software instead of a person.

Another example is the application of blockchain in voting systems in poorly regulated countries. The statement "put your voting record in a tamper-proof repository that doesn't belong to anyone" seems correct, but the question is, do voters need to download blocks from broadcast nodes themselves and crack the Merkel cipher via Linux command lines to know if their votes have been counted? Or do they need to use an application provided by a third-party trusted authority responsible for overseeing the voting to find out the true status of the vote?

"I want to see the system's source code to make sure this person hasn't voted twice."

This all sounds absurd. E-book authors and voters use electronic "security" to protect themselves, but malicious users or trusted third-party institutions use smart contracts to steal your savings or tamper with your votes. In the blockchain world, because there is no trust or regulation, individuals are responsible for their own security. And if the software they use has bugs or is compromised by malware, the consequences are even more severe!

Our understanding of blockchain is wrong.

It may be common knowledge that blockchain systems are often perceived as more trustworthy, but in reality, they are among the least trustworthy systems in the world. In less than a decade, three of the top Bitcoin exchanges were hacked, another was prosecuted for insider trading, the model smart contract project DAO came to an end, cryptocurrency prices became inflated and volatile, and Bitcoin itself was backed by billions of dollars in fraudulent transactions.

Blockchain systems do not guarantee the credibility of the data people input; they only guarantee that the data cannot be tampered with. A fruit grower may spray pesticides on his mangoes, but he can still record in the blockchain system that his mangoes are completely organic. A corrupt government can create a blockchain system for counting votes and secretly input millions of extra votes for its cronies. Even an investment fund with a digital license can still misallocate funds.

Can blockchain prevent this fruit farmer from spraying pesticides on his mangoes?

So where does trust come from?

In the example of buying an ebook, even with a smart contract, without auditing the software, you can only rely on four "traditional" trust mechanisms: you know who the smart contract's author is and believe they are trustworthy; the ebook retailer has a good reputation; you or a friend have successfully purchased an ebook from this retailer in the past; and you hope the retailer will be honest and trustworthy. For all four of these scenarios, even with a smart contract, you still need to rely on the credibility of the intermediary or seller. The smart contract still works, but its transparency is lower, not higher.

The same applies to vote counting. Before blockchain, we could only trust that polling authorities would handle ballots fairly, that only legitimate voters participated, that ballots were anonymous and could not be obtained through coercion or bribery, that the ballots displayed on the announcement system were genuine, and that political cronies would not receive extra votes. Blockchain will not make these problems easier to solve; on the contrary, it will only increase the difficulty. More importantly, solving these problems with blockchain requires certain methods that undermine the core promise of voting. In fact, looking at any blockchain solution, we inevitably find that they all establish trust entities in a world lacking trust through some means.

Original digital currency system

Without the "traditional" factors, relying solely on the self-interest and self-protection mechanisms of blockchain to create real-world systems could very well lead to a quagmire.

Over 800 years ago in Europe, governments were weak and incompetent, thieves roamed freely, secure banking systems existed only in dreams, and personal safety hung precariously on the line. Somalia today faces a similar situation, and conducting transactions on the blockchain shares some similarities.

I believe no one wants our world to become like Somalia!

Even die-hard cryptocurrency enthusiasts don't fully trust their own systems. 93% of Bitcoin is mined by regulated groups, but these groups don't use smart contracts to manage spending.

Silk Road is an online drug marketplace powered by digital currency. The key to this website isn't Bitcoin (used to circumvent government regulations), but rather a "reputation score"—a higher score indicates greater trustworthiness of the drug dealer. However, this reputation score isn't tracked through a tamper-proof blockchain system; instead, it's manipulated by a middleman!

If Ripple, Silk Road, Slush Pool, and DAO all rely on "traditional" systems to establish trust, then it means that a truly trustless system does not exist in our world!

It's time to abandon blockchain.

Using decentralized, tamper-proof repositories to track mangoes' origin, freshness, and pesticide use seems plausible. However, in reality, food safety laws, non-profit organizations or government inspectors, independent news media, authorized whistleblowers, reputable food stores, and local farm markets are far better at this. Those truly concerned about food safety won't use blockchain because they believe trust is stronger than no trust at all. Blockchain technology has already revealed its flaws; storing data as a long string of small files has no necessary connection to whether farmers are truthfully reporting pesticide use on mangoes. Similarly, peer-to-peer interactions, lacking oversight, regulatory constraints, intermediaries, or trusted entities, represent a very poor form of authorization.

Trustless projects fail because they fail to deliver real benefits to users. Trust is absolutely crucial! In a world without law and trust, self-interest is the only remaining principle, and security exists only in wishful thinking. Such a world is not paradise, but a den of iniquity.