What are the best criticisms of blockchain technology? Specifically, what are the top flaws of the blockchain as it's currently implemented by Bitcoin?
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1One of the major downsides in my opinion is the fact that mining consumes lots of energy.– Luca MatteisCommented Jun 3, 2015 at 15:02
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@LucaMatteis: I was thinking: (1) double SHA-256 proof-of-work isn't computationally useful for anything (GridCoin is still affected by this criticism to a certain extent); (2) it's not as immune to centralization as it could be (control of blockchain is proportional to computing power; it should be proportional to number of human users).– GeremiaCommented Jun 3, 2015 at 20:03
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Also, the "one CPU, one vote" ethos seemed to be quite important, unless ASICs eventually become widespread, which we hear about a lot, but the truth is a few conglomerates control the mining pools: is that so different to today's more efficient system?– Wizard Of OzzieCommented Jun 4, 2015 at 7:12
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related: What security threats does blockchain technology solve or present?– Murch ♦Commented Jun 9, 2015 at 11:50
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1 Answer
Decentralized technology is inherently more inefficient than centralized tech. In Bitcoin this expresses e.g. in the difficulties to implement Scalability and the Proof of Works energy consumption.
The other most prevalent criticism I've read is that there is no central instance in Bitcoin to dampen value swings. The predetermined rate of money creation does not leave any option of steering the money supply. While this is something many Bitcoin advocates like about the project, citing the patchy performance of central banking in the past, the resulting volatility is frequently listed as the most important design flaw of Bitcoin.
