In the wake of the cryptocurrency boom, blockchain was elevated from obscure ledger technology to panacea status. Pundits, startups, and legacy institutions alike began to tout blockchain as a revolutionary tool that would redefine finance, logistics, voting, identity, and virtually every other function of society. The core promise was simple – trust no one, trust the blockchain. But after over a decade of experimentation and evangelism, a difficult truth is emerging: for the vast majority of its supposed use cases, blockchain is a complex, inefficient answer to questions that have already been answered more simply and reliably by traditional databases and legal contracts.
At its core, blockchain is a distributed ledger – an append-only database that is cryptographically secured and replicated across a network of nodes. Its defining feature is immutability. Once something is written to the chain and agreed upon by the consensus mechanism, it cannot be changed without enormous effort. This structure is valuable when parties genuinely lack trust, are unwilling to rely on any central authority, and need verifiable transactions with no ability to later alter records. In such cases – say, in cryptocurrency trading or cross-border transactions between mutually hostile states – the cost and complexity of blockchain may be justified.
But these scenarios are rare. Most real-world institutions do not function in a trustless vacuum. Commerce, governance, and logistics all rely on deeply embedded relationships and well-established mechanisms for managing risk. Most parties in a supply chain, financial network, or voting system already operate within legal frameworks, regulatory oversight, and reputational constraints. Trust, while never absolute, is rarely absent. And when trust fails, societies have courts, regulators, and binding contracts – not blockchains – to adjudicate disputes.
For instance, take the much-hyped application of blockchain in supply chains. It is true that many supply chains suffer from data fragmentation, fraud, and lack of visibility. But these are not technical failures – they are often organizational or political. If two companies are willing to share information transparently, a traditional relational database, possibly with API access and audit logging, is entirely sufficient to trace goods, monitor conditions, and ensure compliance. Blockchain adds little to no value in this context unless the parties fundamentally do not trust each other – in which case, a database will still fail without legal enforcement or cooperative governance. The blockchain does not make people honest. It only makes it harder to lie undetected. But in many cases, trust isn’t broken – it’s just poorly organized.
Even in finance, where blockchain has arguably had the most impact, its utility is often overstated. Decentralized finance (DeFi) platforms promise freedom from intermediaries, but in practice, they simply replace banks with code – often opaque, insecure, and unauditable by the average user. Meanwhile, traditional financial institutions continue to process millions of transactions daily with databases that are faster, more scalable, and easier to update when bugs or fraud occur. Blockchain may be useful for niche applications like international remittances where correspondent banking is slow and expensive, but even there, fintech companies are finding ways to solve these problems without distributed ledgers.
The voting use case is another persistent myth. Advocates argue that blockchain can make elections more transparent and tamper-proof. But this overlooks the fundamental nature of democratic accountability. A vote must be both anonymous and verifiable – two conditions that are extremely difficult to reconcile on a public ledger. Furthermore, the real challenges in voting are not technical but political: voter suppression, gerrymandering, disinformation, and access to polling places. No blockchain can fix these. In fact, introducing complex digital infrastructure can add new vulnerabilities and reduce trust in outcomes.
The underlying assumption that drives blockchain hype is that trust is either broken or irrelevant. But in most societies, trust is not binary. It is layered, institutionalized, and often substitutable. When two parties do not fully trust each other, they often invoke a third party – a regulator, an auditor, or a contractual framework. These intermediaries provide dispute resolution, incentives for honesty, and mechanisms for correction when things go wrong. Blockchain tries to replace these institutions with code, but in doing so, it shifts risk from social systems to software. And software can be wrong, just as humans can.
Moreover, blockchain is not without cost. The energy consumption of proof-of-work chains is well-documented. Even newer, more efficient consensus mechanisms like proof-of-stake introduce complexity and centralization risks. The promise of decentralization often gives way to new forms of concentrated power – mining pools, validators, and platform developers with disproportionate influence over supposedly trustless systems. Far from democratizing infrastructure, many blockchain projects recreate the very hierarchies they claim to disrupt.
None of this is to say that blockchain has no legitimate uses. In contexts where traditional institutions are absent or compromised – such as in authoritarian regimes or for stateless populations – decentralized tools can offer lifelines. In niche cases of asset tokenization, secure timestamping, or public transparency, blockchain may serve as a useful mechanism. But these are the exceptions, not the rule.
The broader lesson is this: just because trust is imperfect does not mean it must be eliminated. In most systems, trust can be managed through contracts, law, and mutual accountability – tools that are centuries old but still vastly more adaptable than immutable code. Before reaching for the blockchain, we must ask not just if a problem can be solved with a distributed ledger, but whether it should be. In most cases, the answer is no.