Louigi Verona's Workshop

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Blockchain Q&A

by Louigi Verona
last updated on the 10th of July 2018

Summary of my experience and current views

I have stumbled upon Bitcoin in 2010. At that time I was a rather anarchism-leaning youth and Bitcoin interested me a lot. It also fascinated me from a purely engineering, geeky point of view. I have taken part in a number of blockchain panels as a technical expert. Have purchased Bitcoin and mined it. Was cheated by the infamous Buttefly Labs out of all of my Bitcoin, although I was one of the lucky ones in that I actually got the device, albeit in a barely usable state.


For several years I have distanced myself from cryptocurrencies, partially because frustrated by rampant fraud, but mainly because I moved on to other interests. When Bitcoin came claiming the mainstream in 2017, everyone started talking and writing about it, my friends and former colleagues went to work in blockchain startups. Having refreshed my memory and carefully read everyone's rosy view of blockchain's future, I realized I don't see it this way. This Q&A was born not out of my tendency to be an occasional kill-joy (an unfortunate role of a critical thinker), but to organize and present my reasoning to those interested in the topic.


To summarize my views, I believe that blockchain is an incredibly clever idea to prevent double-spending, but I don't see any real world problems that blockchain is particularly good at solving. In my view, blockchain was initially a deeply ideological and political project by crypto anarchists to create a financial system that would somehow start functioning outside of law, completely decentralized. I find this plan to be incredibly naive, but instrumental in understanding why blockchain was designed the way it was. I see no viable path forward for Bitcoin or any other cryptocurrency to ever become actual currency.


Finally, I am hugely skeptical of more generic blockchain applications, be it Etherium, smart contracts in general or all those endless ideas to use blockchain for this or that.


To find out why I am skeptical, explore the Q&A below. If you disagree and do not find a satisfactory counterargument, feel free to contact me. If you have an idea of a problem that blockchain is a perfect solution for, drop me a line as well.


I don't have a stake at this. If I am wrong and blockchain turns out to be a transformative technology - great. I will acknowledge I was wrong. After all, predicting the technological landscape of the future is always a thankless job, I am at least basing my criticism on what I believe to be sound reasoning. If I am right - this is not because I am a genius, but because I have enough of a technical background to understand how blockchain works, and enough of product management experience to see that it's unlikely to be good for anything.


This page is a constant work in progress and is updated often.


Contents

0. What is blockchain?

1. Can you summarize the problems you see with the blockchain technology?

2. Doesn't blockchain provide a technology that cannot be controlled by any institution, specifically governments?

3. How can governments ban Bitcoin?

4. You frequently say that Bitcoin's history is important in order to understand the current state of affairs. Why?

5. Are you saying that decentralization is not an advantage?

6. Bitcoin's history is irrelevant. What's relevant is what the blockchain will end up being used for.

7. If blockchain is as useless as you say it is, why do so many people find it plausible that Bitcoin or some other cryptocurrency might actually be adopted as currency?

8. Blockchain is useful because it is a truth preserving machine.

9. Blockchain is useful because it removes the need to trust a third party.

10. The Bitcoin whitepaper lists problems that can be solved with the help of a blockchain.

11. Can't blockchain solve problem [insert anything here]?

12. Bitcoin has multisignature transactions which are as reversible as credit card transactions are.

13. Bitcoin is like the early Internet. Nobody thought the Internet would be useful in the early 90s!

14. Your claim that blockchain has not solved any problems is incorrect: ICOs are solving the problem of crowdfunding startups.

15. Cryptocurrencys' scalability is being addressed, and solutions are already being deployed!

16. Buyers are protected from fraud by blockchain being transparent. Stolen funds can be easily tracked.

* Suggested reading.

What is blockchain?

Blockchain is an append-only database that contains cryptographically linked data records, with these records being added when multiple distributed parties come to a consensus based on predefined rules.

In simpler language: it is a long sequence of records, where every record contains a hash of a previous record, new data and an answer to a difficult math problem. Solving this problem allows you to append the next record and at the same time gives you a reward, typically in the form of newly generated money.

The most established blockchain is the original Bitcoin blockchain.


Can you summarize the problems you see with the blockchain technology?

This is the briefest summary possible. Each of those points is explored in greater detail throughout this Q&A.


Doesn't blockchain provide a technology that cannot be controlled by any institution, specifically governments?

It doesn't.

For one, every blockchain, be it Bitcoin, Etherium or something else, has a development team behind it. Proponents of blockchain focus on governments and banks, but completely forget about the authority that has direct access to how a given blockchain behaves. The development team will periodically make decisions that are capable of dramatically changing the algorithm. As demonstrated by numerous forks of both Bitcoin and Etherium, these decisions can be quite controversial.

Even the promise of Bitcoin's limited supply can be overridden by Bitcoin developers at any moment. And while this is unlikely to happen, it is crucial to keep that prospect in mind.

As for governments, governments cannot control blockchain only if you define "control" in the most straightforward manner possible. If anything, blockchain is a technology that is especially vulnerable to manipulation by larger actors that possess vast resources. For instance, a government of any bigger country in existence today can mount a 51% attack on a decentralized Bitcoin network in a matter of days. It would not even need to override all of it. Rewriting the records of a year worth of transactions is enough to reduce the price of Bitcoin to somewhere around zero.

Even now we are seeing miners becoming more and more centralized. In 2014 the GHash.IO mining pool exceeded the 51% threshold. While many mining pools have decided to not exceed 39.99% to avoid this situation in the future, there is nothing inherent in the Bitcoin protocol to prevent this from happening. The increasing complexity is going to make mining more and more expensive, and thus more and more concentrated in the hands of those who can afford the equipment. And while the 51% attack does not guarantee success, it can probably guarantee to destroy trust in Bitcoin as a currency.


How can governments ban Bitcoin?

Based on my conversations with proponents of cryptocurrencies, as well as reading their writings, the myth that blockchain in general and Bitcoin in particular cannot be banned by a government seems to be based on a very superficial reading of what a Bitcoin ban might look like.

Somehow, Bitcoin proponents understand it as seizing mining equipment and banning the ownership of Bitcoins themselves. Having constructed this strawman, they then easily cast it down, explaining that no government would ever have enough resources to hunt down every Bitcoin mining operation, while banning bits and bytes is an even bigger logistical nightmare.

This, of course, has nothing to do with how an actual Bitcoin ban can happen. In fact, a ban of any kind of currency rarely involves seizing the coins themselves. Rather, what's banned are transactions using that currency.

So, all a government has to do is make Bitcoin transactions illegal. This would suffocate the adoption of the cryptocurrency very quickly, since most businesses would not want to risk criminal prosecution. At the same time such measures would significantly drop Bitcoin's price.


You frequently say that Bitcoin's history is important in order to understand the current state of affairs. Why?

The history of Bitcoin's rise to fame is important in order to understand the roots of today's widespread myths and misconceptions about the technology of blockchain in general, and Bitcoin in particular. It is important because the beliefs and core soundbytes of Bitcoin's early adopters have made their way into the technological and business sectors.

Initially, blockchain was championed (and perhaps even developed) by the so-called crypto-anarchists, a community of anarchists who try to use cryptography as a tool to enact their political vision. They believe that cryptography is capable to weaken the power of government and other centralized institutions. A famous crypto-anarchist Timothy C. May writes:

Some of us believe various forms of strong cryptography will cause the power of the state to decline, perhaps even collapse fairly abruptly. We believe the expansion into cyberspace, with secure communications, digital money, anonymity and pseudonymity, and other crypto-mediated interactions, will profoundly change the nature of economies and social interactions.

Governments will have a hard time collecting taxes, regulating the behavior of individuals and corporations (small ones at least), and generally coercing folks when it can't even tell what _continent_ folks are on!Cyphernomicon

The failure of this prediction should be fairly obvious by now. While perhaps such naivete is understandable coming from computer engineers in 1994, even back then it should have been clear that such a blissful state of things would only last up to the point that cryptography becomes more regulated. Today, as Bitcoin and other cryptocurrencies begin to enjoy the attention of governments and financial institutions, regulation is being promptly developed.

Some of May's statements, though, should have been puzzling even in 1994, like his contention that cryptography would somehow help people avoid taxes. It's not entirely clear how he envisioned it, unless he thought the whole world would switch to cryptography and move all life entirely to the Internet.

Although today many blockchain proponents would say that cryptocurrencies are, of course, not actual currencies, initially Bitcoin was envisioned as a decentralized currency that would trump the current banking system and put power into the hands of the people. Satoshi Nakamoto, the enigmatic inventor of the blockchain, in his well-known white paper writes:

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network.Bitcoin: A Peer-to-Peer Electronic Cash System

In other words, Satoshi was aiming to solve the problem of double-spending in order to create a decentralized digital currency.

And it is this crypto anarchist ideology of ultimate decentralization that has sold its soundbytes to technology and business as being advantages and solutions. Only what many people involved in the blockchain hype might not know is that the problems that crypto anarchists are solving might have little to do with what the rest of us would like to solve.


Are you saying that decentralization is not an advantage?

Decentralization might be an advantage in one case, disadvantage in another. I definitely do not view decentralization as the holy grail of human society.


Bitcoin's history is irrelevant. What's relevant is what the blockchain will end up being used for.

A historical perspective is useful in helping one realize that perhaps the main advantages of blockchain should be re-examined.


If blockchain is as useless as you say it is, why do so many people find it plausible that Bitcoin or some other cryptocurrency might actually be adopted as currency?

Because most people who have invested their time, money and efforts into Bitcoin seem to be idealistic engineers with no understanding of economics, commerce and product management, and because at the time what a cryptocurrency could offer seemed to them like genuine improvement.

As someone who had followed Bitcoin since 2010, sat on panels with crypto-anarchists and even mined a little bit of the famed digital coin, I can say that the level of ignorance on the subject among early adopters was colossal. People misunderstood fractional reserve banking, did not know the difference between types of money, such as commodity and fiat, believed all sorts of conspiracy theories about banks and corporations, and held bizarre and emotionally charged views about what function money plays in society.

Satoshi's original white paper outlines what he believes to be problems with the current monetary system - problems his electronic cash was to solve. These problems include:

From the tone of Satoshi's white paper and from some of the writings of crypto-anarchists, like that of Timothy May, and from my own past experience as an anarchism-leaning youth, I get a feeling that their belief in cryptocurrencies is based on the advantages that a cryptocurrency offers, advantages that are obvious and clear to them, though probably not so much to everyone else. The whole concept of exchanging trust-based relationships for a blockchain is based on a thorough distrust of financial institutions and governments.

Bitcoin started out as an incredibly ideological project. It was a way to "fight the system" and identify with a rebellious worldview. I believe that it was this energy that fueled early backers to take Bitcoin seriously.

Afterwards Bitcoin began to be adopted by people who simply decided to make money off of it, including those who utilized it for illegal trading, and this phase of Bitcoin was as important. But it would have been completely impossible without the ideological infusion that ocurred in the beginning.

The engineering background of many of the Bitcoin supporters also plays a role. Blockchain is a clever idea and engineers tend to get too focused on this cleverness. Many of them are disconnected from practices of translating technologies into actual products, and are often unable to recognize the ineffectiveness of blockchain as a solution to real world problems.

Outside of this relatively small community of ideological supporters, skepticism towards blockchain is pretty common. Even people who join blockchain startups find it normal to voice doubts about the long-term relevance of blockchain technology.


Blockchain is useful because it is a truth preserving machine.

This commonly promoted sound byte is untrue.

The critical problem of blockchain is that it cannot handle mistakes. In other words, the blockchain concept assumes that we start with a true statement, and then focuses on preserving that statement. But what if the initial statement was an error?

Blockchain has no mechanism of handling errors. Anything inputted into the system and then verified by the distributed consensus process is treated as "truth", truth that blockchain will not let go of. This makes blockchain a perfect environment for fraudsters and thieves, because whatever a malicious actor does becomes irreversible.

So, the blockchain is not a truth preserving mechanism, it is a history preserving mechanism. And it will preserve both true statements and false statements with equal rigor.


Blockchain is useful because it removes the need to trust a third party.

This is mostly false.

Blockchain removes the need to trust a third party if you are a seller. The buyer is actually disfavored by blockchain, since non-reversible transactions are good for a seller, but not for a buyer.

In fact, in the original Bitcoin white paper Satoshi Nakomoto openly states that to protect buyers from fraud "routine escrow mechanisms could easily be implemented", which are a third party service based on trust.

This is why there is so much fraud surrounding Bitcoin. This is not a coincidence. Since the system has a disbalance and one of the parties is at a disadvantage, malicious actors are able to abuse this property of blockchain to enrich themselves.

But this is not the only dependence on a third party. The blockchain development team can change how the algorithm works at any time, therefore at least a certain amount of trust should be put into the developers behind a given blockchain.


The Bitcoin whitepaper lists problems that can be solved with the help of a blockchain.

Satoshi's original white paper outlines what he believes to be problems with the current monetary system - problems his electronic cash is to solve. The whole introductory part of the work consists of two paragraphs, which represent mere 12 sentences. Therefore, Satoshi's reasoning can't help but be cursory. Nevertheless, here are the problems he lists:

Let me briefly comment on them one by one.

i. the inability to make completely non-reversible transactions for non-reversible services

Satoshi introduces a term "non-reversible services", but does not define it. It is not entirely clear what he means, as any service is an intangible good and, thus, non-reversible. At the same time, a poorly executed service might justify a customer asking for a refund. Is such a service non-reversible?

Either way, a completely non-reversible transaction is a transaction that protects the seller, but not the buyer. It is precisely because of this circumstance that transactions need to be at least somewhat reversible. Modern consumer rights legislation allows the customer to demand a refund within a certain period of time, depending on the jurisdiction. This way a sort of balance is struck between the interests of a buyer and a seller.

Bitcoin unhesitatingly skews the balance in favor of the seller.

But what about the buyer? With all the talk about not having to trust a third party, Satoshi states that in order to protect buyers from fraud "routine escrow mechanisms could easily be implemented". In other words, a third party service based on trust.

And, of course, completely non-reversible transactions are a haven for fraudsters. They add an additional incentive to thieves, because once cheated, the buyer has no recourse but to move on.

ii. the cost of mediation increases the cost of transactions, preventing casual micropayments

The Bitcoin protocol does not necessarily solve this problem, as it has a fee embedded into every transaction, and although it is not a blocking fee - one can send the payment without it - due to the very low transaction threshold a fee is very mandatory in many cases. During the heavy traffic of December 2017 Bitcoin fees jumped to as much as $50. So much for casual micropayments!

It is also not clear what enables Bitcoin to be so attuned to micropayments. Satoshi seems to argue that the absense of disputes mediation leads to low cost transactions. And yet his system introduces a new cost, a cost of proof-of-work. While in the beginning miners could be relied on to mine for a reward, increasing complexity and decreasing rewards are bound to eventually force them to ask for a fee. So, how does that lower the transaction cost? It actually raises it in the long run.

Thus, we are forced to conclude that blockchain is not especially fit for casual micropayments. The only reason why most of the time using Bitcoins for such payments works is because most of the time traffic is low and fees are unnecessary. A wide adoption guarantees fees to be high.

iii. the need for merchants to ask for more information about buyers than they would otherwise need

Satoshi writes:

With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.Bitcoin: A Peer-to-Peer Electronic Cash System

As I mentioned earlier, Bitcoin white paper focuses on technology, not on philosophical reasoning to introduce it. Therefore, one would not necessarily expect it to provide in-depth argumentation. It is also possible that Satoshi was addressing people who had enough of a context, and he might have felt no detailed explanation was necessary.

Having said that, Satoshi's analysis as it's presented in the white paper is incredibly superficial and problematic.

First of all, we must again notice how he seems to be identifying with the merchant's point of view. As if merchants are not able to cheat customers! The only concern for buyers expressed in this paragraph is that buyers are "hassled for more information". An inconvenience, perhaps. But either Satoshi believes that merchants rarely cheat customers, or is simply uninterested in that use case.

Second, he seems to claim that a certain percentage of fraud is accepted as unavoidable due to the current state of affairs in the financial world, with the implication that his system is such that any fraud is avoidable. Even on a theoretical level this is ludicrous: a certain percentage of fraud is accepted as unavoidable in all cases, due to the fact that we are humans, we make mistakes and can thus always be cheated under right circumstances. No technology would be able change that.

But we are in a position to go further and look at the empirical evidence. The amount of fraud surrounding Bitcoin and other cryptocurrencies is immense. Definitely, not less that in other areas of human activity. And, due to the lure of non-reversible transactions, lone hackers were able to kill off whole businesses and force blockchains to fork due to the unthinkable sums swindled. Computer viruses routinely scam people out of their Bitcoins. Even if the address is tracked, people's funds are now stuck in someone's wallet.

Satoshi seems to base his confidence in Bitcoin on a ridiculous statement that physical currency somehow avoids payment uncertainties. This again makes sense only from a merchant's point of view, whose goal is to receive the payment. Nothing is solved for the buyer. If the buyer was cheated, their physical currency is gone.

But yes, the merchant no longer needs to know anything about the customer. Was that such a big problem to begin with?

Conclusion

The conclusion must be that Satoshi's case is simply unconvincing. His analysis of the financial world is superficial and riddled with shallow insights. His Bitcoin solution is contradictory and of questionable quality:

The only thing that Satoshi's solution definitely does is solve the rather academic problem of double-spending. And the solution is academic as well: clever and impractical.


Can't blockchain solve problem [insert anything here]?

The main criticism of blockchain is not that it cannot solve a given problem. It is that it's never the most effective solution.

The only way blockchain can be thought of as the most effective solution is if one considers decentralization to be the main goal, with governments, banks and other such insitutions viewed as malicious actors.

Proponents of blockchain-based technologies need to understand: blockchain is a political anarchist project to build a currency that would work outside of law. It is tailored towards solving a particular ideological problem, and this problem is to try to remove any financial and governmental authority from a transaction between individuals - not make this transaction quick, scalable or efficient. To a crypto anarchist all those tasks are quite secondary.

And, unfortunately, crypto anarchist goals have been perfectly translated into blockchain, which is good at removing an authority from a transaction between individuals, but not particularly good at anything else.


Bitcoin has multisignature transactions which are as reversible as credit card transactions are.

This is false.

Multisignature transactions are transactions that should be approved by more than one party. Once the transaction is signed off, there is no way to reverse it.

What proponents of Bitcoin are referring to is one of the use cases of multisignature transactions, as described in the Bitcoin Wiki, "2-of-3: Buyer-seller with trustless escrow".

The idea is that if the transaction goes smoothly, then both seller and buyer sign off on the transaction. If something goes wrong, both could choose not to proceed and cancel the transaction. If there is a disagreement, a third-party arbitrator decides who is right and gives them their additional signature, thus moving the transaction forward. The scheme is misleadingly called "trustless escrow", because the arbitrator cannot steal the money as they have only one key. But, obviously, both sides of the transaction should trust the arbitrator to not be biased, so the escrow is not entirely trustless.

The problem with this scheme is like with any escrow: it makes the initiation of a transaction more involved, but once it is signed off, there is no way to reverse it.

Consider a situation when a product is delivered to the buyer, they are happy and sign the transaction. A week later a serious problem with the product is discovered, something that was impossible to notice on delivery. However, the transaction is non-reversible, and the only recourse the buyer has now is outside of blockchain.


Bitcoin is like the early Internet. Nobody thought the Internet would be useful in the early 90s!

This seems to be a very popular argument among crypto enthusiasts. The idea here is that if you look at many successful technologies, in the beginning they probably made little impact on our everyday lives and seemed useless to many people.

The primary weakness of this argument is that it can be basically applied to anything. After all, skepticism is a reaction reserved not only for revolutionary ideas, but also for genuinely bad ones. And while a given technology might seem useless because it is still very new, it might also seem useless because it really is.

The only way the statement works is if you already believe that blockchain is a revolutionary technology, and your goal is to explain how important you think it is by comparing it to something as pioneering as the Internet. It, however, is not an argument that lends credence to the claim that blockchain actually is as pioneering or useful as the Internet.

Additionally, I don't think that there is much evidence that the Internet did not seem useful in the early 90s. Of course, nobody knew exactly how much it will reshape our lives, but the core difference between Internet technologies and blockchain is that Internet immediately started solving real problems. Blockchain so far has solved none, unless you count illegal trade and unregulated ICOs.


Your claim that blockchain has not solved any problems is incorrect: ICOs are solving the problem of crowdfunding startups.

ICOs (Initial Coin Offerings) are often cited as the most visible achievement of blockchain: a solution to a problem of raising funds. And indeed, although by middle of 2018 most ICOs have already failed, there are several success stories.

Unfortunately, the argument that this proves blockchain has found its niche use case is flawed.

First of all, I would argue that the only reason ICOs are a thing is due to the hype around blockchain and digital coins. In any other situation it would be very difficult to imagine anyone wanting to invest in a business by purchasing an unregulated virtual token. And if the blockchain hype is unfounded, arguing that a misguided public interest in blockchain proves the usefulness of blockchain is textbook circular reasoning.

But the most important argument is that ICOs are useful only as long as they are unregulated. Investopedia writes: "An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks."

And this is exactly what's happening. ICO is simply a cheap way to raise funds for companies that would otherwise not qualify for a proper IPO. Not only that, but in the vast majority of cases these coins come with no guarantees or rights for their holders, which means they are essentially a way for the company to get funds with no strings attached. After all, there are reasons why IPOs are highly regulated: this regulation is not a conspiracy of bankers, but instead measures to tackle problems that typically arise in financial investment.

And it is important to point out that I am not arguing that most ICOs are scams. Even if we imagine that none of them are scams, they still usually come with no legal strings attached, because this is precisely the point for a startup to go for an ICO.

So, sure, in the short-term blockchain is solving a problem. But it is a temporary solution, similar to taking advantage of a legal loophole.

We are already seeing regulation catch up with blockchain startups. After China banned ICOs completely, companies promptly moved to Hong Kong, only to find themselves being regulated by the Securities and Futures Commission (SFC). And the regulation came down to forcing companies halt their coin offerings and refund the value of tokens to their investors. This, by the way, is a good demonstration of how a cryptocurrency may be banned - quickly and effectively, in spite of all the decentralization.

Of course, blockchain proponents might actually say that they would value ICOs being properly regulated. In that case, I see no reason why ICOs are not going to enjoy the same level of regulatory scruitiny as IPOs, if not even higher.

But once ICOs are regulated they way IPOs are, I no longer see a case for blockchain.


Cryptocurrencys' scalability is being addressed, and solutions are already being deployed!

The solutions that are being deployed are marginal. The current limit of Bitcoin is believed to be 7 TPS (transactions per second). Bitcoin Cash, crypto-world's enterprise to deliver scalability, has increased this number to maybe about 35 TPS by increasing the block size limit from one megabyte to eight megabytes. The change was so controversial that Bitcoin Cash had to hard fork.

Now consider the throughput of Visa, which can handle over 24,000 TPS according to the 2010 numbers. Today a number of 60,000 is thrown around, although I could find no sources for this.

But let's say that eventually one of the coins does reach a satisfactory throughput. After all, Paypal claims to have TPS slightly over 190, which is not that far off.

Another scalability factor is the cost of proof-of-work, which grows rapidly. Even today Bitcoin mining consumes as much energy as Chile. If more people start using Bitcoin, energy consumption will continue to grow, and that contest is unlikely to stop. I consider the cost of proof-of-work to be a bigger issue than TPS.

But, most importantly, I don't consider scalability to be the killer bug of blockchain. This is an engineering problem, and I can imagine developers eventually figuring it out.


Buyers are protected from fraud by blockchain being transparent. Stolen funds can be easily tracked.

This is neither protection from fraud nor a reliable way to get back stolen money.

First, tracking stolen funds does not help much. It might prevent a thief from spending them through legal means, but that's pretty much it. Even if a criminal is somehow completely prevented from spending the money, at the end of the day your money is now stuck in someone else's wallet with no viable path to get them back. Computer viruses have sent people's Bitcoins to wallets where they sit idly for years.

But in reality criminals are cashing out, even in cases of high profile crimes. This is done by using bitcoin mixers, which make it very difficult and eventually plain impossible to tie cryptocurrency that ends up in legitimate exchanges to the initial attackers. The owners of the WannaCry ransomware attack wallets have cashed out in August 2017, three months after the attack. Same happened to the Bitcoins from the Petya/NotPetya attack. An impressive animation put together by the Quartz journal shows how this looks in the blockchain.

Identifying criminals is also very difficult. If criminals proceed with caution, they might never be found. An interesting article in the Science magazine documents FBI's hunt for the administrators of Silk Road. The only reason several people had been caught was due to their indiscretion. And while newer data science methods might help make this search easier, it will continue to be a very difficult and long process nonetheless.


Suggested reading.

There are many articles published about blockchain everyday. Here is a small selection of writings on the topic from both sides.

Generally supporting blockchain:

Generally criticizing blockchain: