Two Readings Against Blockchain
It’s nice to have a simple point-of-view. Some complex cultural phenomena like the narrowing of the middle class require detailed explanations, argumentation, and citations to detail my perspective.
But my skepticism, and antagonism, towards blockchain and its associated technologies like Bitcoin and NFTs is based on three facts about the technology, and three personal moral stances. As such, if any of the below became untrue, I would soften or reverse my skepticism.
The facts:
- Blockchain, as a technology, has not solved any problem that has not been solved adequately through other methods.
- Blockchain requires a large energy output to operate.
- Renewables factor minimally in electricity production, such that electricity use has a palpable ecological impact through the release of greenhouse gases.
The moral stances:
- Since I worry about anthropogenic climate change, given the third fact above, any use of electricity can only be justified, in my mind, if it produces some good for human society that outweighs the social costs of its carbon output.
- Therefore, if the majority of problems solved by blockchain can be resolved through other means, then expenditure of electricity to operate it is a moral ill that produces no moral good in turn.
- Anything with solely moral drawbacks and no moral benefits is an evil, and we should not put up with evil.
The last moral stance is deceptively simple. If I believe that the good of an action must outweigh the bad of an action, I need to be willing to undertake occasionally strenuous moral accounting to identify the ethics of a situation.
In most cases, it’s impossible to actually undertake such a moral accounting: moral standings are not fungible. There is no conversion rate between loss of human life today versus loss of human life sometime in the future. Then, does the moral benefit of ending the COVID-19 pandemic outweigh the ecological impacts required to ship and freeze the Pfizer vaccine? I like to think so, but we could not reason through this as an accountant might price an asset. For most moral situations, I find, we like to say that we are moral accountants or that we commit to a moral calculus, but there are no calculations under the hood, nor could there ever be.
But there are situations where the ends clearly do not justify the means: when the ends, for example, are nonexistent and the means prove tangibly damaging.
Currently, I think we should halt all activities related to blockchain and decommission the technology. We are lucky here that the goal posts for convincing me that blockchain is worth keeping are easily constructed, and rather immutable. We need pollution-free electricity, or the blockchain must find a problem that it can uniquely solve. I could also be convinced if some combination of the above came to fruition. Maybe, we could get the electric grid to 80% renewables, and find a few small problems that blockchain excels at solving, and I would come around on it. But that would get into the minutiae of moral calculus.
To further frame the argument, I want to provide the two main sources from which I’ve derived the above facts about blockchain.
Blockchain, the amazing solution for almost nothing: This article does a good job outlining the current state of applications and products that rely on blockchain technologies. I would summarize it as follows: what blockchain does is that it creates a framework in which two parties that don’t trust each other can rely on an external ledger to record activities. That was the idea behind Bitcoin. When sending money to someone paperlessly, it’s tough to verify that the sending party actually has the money that they’re purporting to wire to the receiver. Trust is hard. Bitcoin, a distributed ledger, can solve this distrust. Smart Contracts are similar. If either of the parties break the contract, then the Smart Contract can use programmed logic to automatically trigger and punish the bad actor.
The only problem is that human society has spent the last 10,000 years developing solutions to distrust in human society. To deal with bad actors when transferring money, we have banks that can call other banks to ensure that the sending party truly has the cash on hand. And regular contracts, backed by litigation and a judicial system, has done a fine enough job allowing two parties to feel safe agreeing to terms. This is the reason that IBM’s proposal to record patents on the Blockchain is so facile: in a world without patent law, then maybe a distributed ledger would be invaluable to track who owns what inventions. But, in this world, we have frameworks to deal with this mistrust.
As such, the blockchain produces nothing that our social structures have not resolved in a more ecologically kind manner.
Bitcoin, NFTs and other crypto fads are destroying our planet: The Cambridge University study reviewed by this article is my true source for the environmental impact of Blockchain, and I have read a number of different popular science articles summarizing and synthesizing the information therein. The statistic of note is that the annual electricity consumption of Blockchain is about the same as Argentina’s annual electricity consumption. This is an entire developed nation’s worth of electricity producing no moral good to humanity.
For neophytes to Blockchain, I like this article by MSNBC because it makes the science readily digestible. The article also offers a solution to Blockchain that, unless the facts outlined in this post should change, I agree with: which is that President Biden must regulate their usage if we are to see our planet survive climate change.