It is high time to carry out a cost-benefit analysis on the blockchain • The Register

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Opinion In 1960, Theodore H Maiman made the first laser.

Known at birth as a solution to finding a problem, he was awarded a Nobel Prize four years later, was in barcode scanners in stores 10 years later, and in 1979 gave birth to the disc compact.

Not content with enabling digital audio, revolutionizing many sciences and many more, it has since become the glowing heart of the global Internet. Yeah lasers.

In 2009, Bitcoin was invented – another solution looking for a problem. We do not know its inventor. As of this writing, this bastard technology hasn’t solved any issues that needed fixing, but damn it, it has created a few. Let’s put him to the test for his life.

The technology behind Bitcoin, the blockchain’s distributed ledger, is undeniably cool and dangerously alluring to intellectuals. A tamper-proof public database that requires no central control and that is both transparent and anonymous, it has fascinated mathematicians and computer scientists. It seemed then and still seems today that something so clever must be of use to something.

Now we know what it is. Cyber ​​money, by dint of escaping central control, is terribly useful for transferring value outside the banking system. Early boosters said it would cut costs and increase flexibility so that you could and would use it to buy things from corner stores, foreshadowing a future where it, like the laser, would be a ubiquitous component of the experience. sale to detail.

This does not happen. Rather, it is at the heart of a 20 billion dollars a year in extortion rackets in the world. Ransomware, this incredibly profitable mega-heist, uses a lot of techniques and is constantly growing, but it totally relies on cryptocurrency to be worth it.

Cyber ​​currency also has a role in specialty retailing, the kind where drugs, guns, fake IDs, hacking data caches, and dubious services are traded by the half-world of Internet: There is certainly an argument for an open trade in recreational drugs, but not like that.

Another early promise was efficiency. Freed from the need for financial edifices such as banks, regulators, and financial rule books, cyber currency would have an inevitable Darwinian advantage. But baby, Bitcoin isn’t scaling. With insane market swings, freezing transaction speeds, and the miners’ greedy appetite for energy, this stuff is an environmental and practical disaster.

Sweden wants to ban it for its energy consumption, not because it creates so much carbon dioxide, but because it craves so much for renewable energy that there is not enough for everything the world.

Right now, based on a dozen years of hands-on experience, no experience with cyber currency – or anything blockchain – solves real problems. Smart contracts? Not so smart [PDF]. NFT? Ffffft.

If you want to spend a few slightly entertaining minutes, search for “successful blockchain projects”. You’ll find plenty of lists of the 13, 30 or 56 most “disruptive” or “most promising” or “to watch” projects, some with big names attached. The most profitable? The most efficient? Most essential? You’re kidding.

Try searching for “best crypto scams,” however, and you will find a much healthier market. By some estimates, the total amount of money withdrawn from brands around the world dwarfs the transport of ransomware by a factor of five to one. Even if you discount the $ 100 billion in revenue Because the crypto hype is the most hyped hype, the ratio of bad to good is off the scale.

The blockchain is from the bunkum. It didn’t do anyone any good except Boosters, Crimes, and Facilitators. When the best that can be said about a technology is that it has roughly the same role in online crime as stolen art in the physical world – a useful valuable token that’s harder to track than bank transfers – you don’t make the world a better place.

Fortunately, we have ways of dealing with technologies that tend to dishonor themselves. From distillation to driving, from nunchucks to nuclear weapons, the company weighs the reward against the risk, the harm against the benefits, and sets the rules accordingly. Cryptocurrency has had its chance; he deserves to be so tightly controlled that he can barely breathe.

Where cryptocurrencies are hitting the rest of the world and causing trouble, close those paths. We are closing the cannabis farms by tracking energy consumption and heat production, this will be the case for minors. We catch criminals when they conduct transactions they cannot explain, so increase the reporting requirements on exchanges. It takes willpower to say it’s a failed experiment: it is, and it robs billions of people.

As for blockchain projects other than cryptocurrency: the market will take care of it. Do you want to convert your supply chain management to blockchain? Go ahead and see how you stack up against your competition just using databases. NFT – in a well-regulated environment, they can even do good as solid property tokens. Or not, we kinda know how to do that too. Caveat bouncer. Like a dreaded pandemic that turns into a mild fall cold, if the cost of closing them is more than leaving them alone, then let them be. But they can and should be fiercely old-fashioned.

We can’t kill the blockchain: it’s an invention, an idea, and we never live in a society that can erase ideas. It can still come in handy, although you’d better bet on the Vatican beatification of Freddie Mercury. In a world where even lasers are regulated, the need to ruthlessly control the damage that blockchain can do can no longer be tempered by assumptions that never could have been.

He had his chance. Bring the blockchain back to the lab. ®

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