You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work (2019)

Original Article ↗ Hacker News Discussion ↗

Age of the article & hype cycles

  • Several note the piece is “from the past” (2019) and that blockchain has since been largely de‑hyped.
  • Comparison to AI: some expect a similar hype crash; others argue AI is different because it already has wide everyday use.
  • Historical perspective: AI hype has cycled since the 1950s; current AI boom is contrasted with the much weaker real-world impact of blockchain.

Where blockchain/crypto actually get used

  • Many say the only widespread use is cryptocurrency for speculation, gambling, and (often) illegal commerce.
  • Specific non‑speculative examples mentioned:
    • Conflict‑diamond and hardwood tracking using serialized physical markings tied to a ledger.
    • Parametric disaster insurance (automatic payout based on sensor/oracle data).
    • Tokenized T‑bills / RWAs, stablecoins, and cross‑border payments, especially to evade slow/expensive banking rails or capital controls.
    • Smart‑contract governance and on‑chain computation as a niche with growing funding.
  • Some see NFTs/digital objects as a more coherent authenticity use case than physical provenance.

Critiques of non‑currency blockchain use cases

  • Thread strongly echoes the article’s theme: if a normal database or shared SQL system works, blockchain adds cost and complexity for little gain.
  • Physical-object authenticity and supply-chain tracking are seen as fundamentally oracle/IoT problems; blockchain doesn’t solve the “real world to ledger” link.
  • Argument that once you introduce external oracles, blockchain adds negative value versus a trusted database, since trust is already centralized.
  • Enterprise “blockchain as trigger” architectures are reported, from experience, to be poor fits.
  • NIST-style checklists (shared store, immutable log, multiple contributors, no sensitive data) are referenced as a sanity check; almost no projects truly “need” those properties.

Law, politics, and social contract

  • Heated debate over governments holding seized crypto vs selling it, and whether that’s effectively taxpayer exposure.
  • Broader dispute: fiat as part of a social contract funding infrastructure vs cryptocurrency as a way to free‑ride and hoard wealth outside state systems.
  • Others counter that states are unreliable or coercive, and that using crypto to bypass capital controls or sanctions can be legitimate (e.g., sending money to Russia, escaping authoritarian regimes).
  • Crypto’s role in money laundering and crime is acknowledged even by some who still see technical value.

Decentralization, reliability, and technical arguments

  • Disagreement over whether blockchains are truly decentralized or just a single, globally replicated “center.”
  • Bitcoin’s design (no trusted central authority, solution to double spending) is defended; critics reply that real power still concentrates and forks are catastrophic.
  • Oracles remain a central unsolved problem for tying on‑chain logic to off‑chain events; multi‑oracle schemes mitigate but don’t remove trust.
  • Comparisons to Git: both use hash chains; Git already offers immutable history, while branch/tag mutability is a separate, solvable issue without PoW.
  • Scaling critique: blockchain cost grows with users and can’t be “fixed” by L2s in principle, unlike AI which benefits from scale.

User stories vs. “no real use”

  • Some crypto users describe genuine advantages: fast, global, same‑day settlement with stablecoins, bypassing bank delays, freezes, and KYC friction.
  • Skeptics respond that similar things are already available via Wise/PayPal/etc., and frame crypto’s main advantages as speculation and law evasion.
  • A recurring meta‑point: defenders often retreat to “you’re not the target user; others get value,” which skeptics see as evasive and non‑falsifiable.

Communication, grift, and incentives

  • Many note the ecosystem’s “universe of memecoins, hacks, scams” and see that as intrinsic to the technology’s incentive structure.
  • Observation that significant personal investment in crypto makes unbiased evaluation difficult.
  • DeFi marketing is criticized as opaque jargon that hides complex trust models; example projects require deep digging to understand that risk is merely shifted (e.g., from custodial bridges to oracle manipulation).
  • Simple heuristic proposed: ask whether the use case would be better served by an off‑the‑shelf SQL database; for most 2019‑era projects, the answer was “yes.”