Jimmy Song: Why do blockchains without bitcoin have no soul?

Note: The author of this article is bitcoin developer Jimmy Song. In his article, he pointed out that there is no point in the blockchain without bitcoin. Many blockchain applications are in manufacturing problems rather than solving problems.

A common point is that blockchain technology is brand new. If there is enough time, someone will do something useful, but it has nothing to do with money. I think this is called "I want a blockchain don't bitcoin" syndrome. In this article, I will break the myth that the blockchain is about to be put into use. Everything in the future will not necessarily be decentralized. This is not a revolutionary new technology.


Pursuing the five-year blockchain

Businesses' obsession with the blockchain began in 2014, when Bitcoin just entered their sight. Instead of focusing on Bitcoin, a revolutionary, innovative, decentralized, and digitally scarce currency, they extracted a concept from the software and called it a "blockchain."

At that time, a number of organizations were established, such as Hyperledger (superbook), R3, and Digital Asset Holdings (DAH), which tried to create a market around this technology.

What they have in common is to use the term blockchain as a panacea for solving a range of problems in all walks of life. According to the typical business model, they simplified the word "blockchain" to whatever they wanted.

When ignorance meets hype

The development of the term “blockchain” around 2015 is unbelievable. Many people, especially those who don't understand technology, often have a vague understanding of how Bitcoin works. They say "I believe this technology, but I don't believe in Bitcoin". This is clearly a “consensus” response for businessmen who want to be technically ahead.

They do this for two reasons. First of all, Bitcoin did not give a good impression to some extent between 2011 and 2015 and today. Bitcoin is related to the purchase of drugs and even to anarchist capitalists, libertarians and so on. Second, through the praise of blockchain technology, an executive may appear to be at the forefront of technological development, and this technology is too technical, and others cannot raise effective doubts.

In other words, supporting "blockchains" rather than bitcoin has left many companies with an impression of the technology and does not need to be related to Bitcoin. It is clear from the subsequent actions that they do not know what the blockchain is and have laid the groundwork for their ignorance.

Their ignorance has led to many mediocre engineers who know little about incentive systems, game theory, and even public-key cryptography, posing as blockchain experts. These “experts” scam business people and convince them that key issues for specific industries can be solved with blockchains, some developers and money. Our behavior has gone far beyond our own perceptions. There was a lot of speculation before the outbreak of the "Blockchain Do Not Bitcoin" syndrome.

Blockchain: a panacea

This unintelligible behavior led to the emergence of related books such as the Blockchain Revolution, which promises to improve almost all areas of the economy, while ambiguously explaining many technical concepts that led many executives to think Teenagers are afraid to miss the new trend of “blockchain technology”.

To be fair, many companies have been fooled by the blockchain's commitment to solve real-world problems in the industry. In the medical industry, the blockchain can provide medical records to medical workers at the right time without invading the privacy of patients. In the legal industry, blockchain will create completely fair contracts without the need for expensive lawyers. When it comes to the supply chain, the blockchain will be able to prove who is wrong with certain parts, or how to account for the lack of parts delivery. In the arts, music and television, blockchain will reward creators while combating piracy and eliminating middlemen. For online advertising, the blockchain will track exactly, reduce fraud, and eliminate many different middlemen who have gained a large portion of their profits. What can be solved about the "blockchain", we can continue to talk about it.

It is no coincidence that these commitments correspond to the huge problems facing each industry. The blockchain becomes a blank canvas, and any problem can be drawn on it. In fact, hundreds of startups and industry alliances, many of which have launched ICOs, are committed to using the “blockchain” to address inefficiencies in all industries.

Many of these startups are created by veterans of a particular industry who believe that the only thing missing is the developer, who is responsible for creating a blockchain system that solves all problems. The reason they give is that they have the expertise, know where the problem is, and only find a few blockchain experts to make their industry better and create huge profits for themselves.

Blockchain in reality

If these developers can meet the needs of industry veterans, everything will work! A perfect, auditable, decentralized, encrypted database that can quickly and efficiently execute terabytes of smart contracts with a zero-knowledge proof interrogation machine. How hard can it be? Of course, a few lines of Solidity code can create a scalable, fully normal and maintainable system that solves the biggest pain points in an industry, right? There is no such good thing.

The blockchain has become a meaningless buzzword that uses fancy terms to convince people that challenges can be solved. The reality is very different. These startups have found that blockchain is not a panacea. The first problem they encountered was that we had known it for a long time, such as a prophecy question, or a consensus question, or an analyzability problem with a Turing-complete contract, or a free rider. It turns out that blockchains are not omnipotent, but because of the need for decentralization, these solutions are hindered.

To make matters worse, the developers responsible for creating these systems often completely ignore the incentives of users and nodes, as well as possible vulnerabilities in a confrontational environment.


Sadly, the results of these tricks are predictable. When you make a commitment beyond your ability with a mediocre talent on a technology that few people know, you will not be able to make much contribution. Most of these efforts have not yielded any results. A few companies that have created proof-of-concept projects have yet to introduce mature products. The products that have been released are almost unattractive (less than 2,000 users per day are considered to be a complete failure of an app or website).

Despite this, ICO is still selling decentralized blockchains. When the difference between commitment and outcome is pointed out, there are usually several different arguments.

In addition to Bitcoin, how can you be sure that blockchain technology will not have other outputs?

Just a counterexample can prove my point: the blockchain is actually only useful for sound money. However, on the basis of not destroying the term blockchain, the essence of the blockchain is decentralization and authority, and modifying data is expensive. This is not surprising, because these attributes are exactly the sound currency you want, like bitcoin.

Unfortunately, non-monetary projects often require a centralized, scalable, and scalable system because it is a regulated, constantly changing, and growing industry software. When combined with a blockchain, each requirement becomes more difficult. In other words, blockchain is a tool that is not suitable for these tasks.

Even if a miraculously popular application is made on the blockchain, centralized applications without blockchain will be cheaper, faster, more reliable, and easier to maintain, unlike the decentralized blockchain. There is a single point of failure. In other words, any popular dApp is destined to lose to a centralized competitor in terms of cost, speed, functionality and scale.

So many people are studying the blockchain! There must be output.

Many people are doing something that does not mean that the wish will magically become a reality (see: alchemy, cold fusion, flying cars, etc.).

This may exaggerate this. Flying cars are at least feasible. Most of the blockchain projects are in the development of square circles or perpetual motion machines: decentralized services for centralized control, which is logically impossible.

I can think of what people who criticize me will say: "Jimmy is against experimentation, starting a business, and trying new things!" Experiments can begin, but it is a waste of money to continually invest in failed experiments. These “blockchain” experiments are futile, with little foundation in reality, a waste of capital and manpower, and no useful goods or services. What they do is to allow the scammer to take root.

Invested so much money! Someone can make something!

Some engineering challenges are not at all financial issues, but innovations. To make matters worse, when a company is asked to use a particularly troublesome technology like a blockchain to tie hands and feet, the chances of getting any benefit are even smaller. This is a typical mistake in finding a solution. No, the money won't magically find a profitable market problem, and the blockchain is not necessarily the optimal solution.

in conclusion

“To blockchain without bitcoin” is not a new concept. In the past five years, the so-called “blockchain” technology has had no results, and we are unlikely to see any results in the next five years. The only thing that the blockchain excels at is that it promises to solve the biggest problem, while producing very little and consuming huge capital.

Blockchain is a manufacturing issue. Too many people were deceived by the “blockchain”, pretending that the naked emperor was wearing clothes. Their imaginary clothing seems to be the perfect solution to their industry's biggest problems. Unfortunately, wishful thinking is not a reality.

I am sorry to tell you this bad news, but the emperor did not wear clothes. A blockchain without Bitcoin is a burger without stuffing.