Part 4 of 4 — what blockchain is genuinely good for, and what it is not.
Here is the part nobody leads with, because it doesn’t sell tickets. Blockchain is slow. It is expensive. It is fragmented into hundreds of chains that cannot speak to one another. Seventeen years after the first block was mined, it has not replaced the financial system, and there is no sign it is about to.
I spent three articles sharing why this technology is beautiful. Let me now spend one telling you where it breaks, because — and I mean this sincerely — the person who understands the limitations is worth ten of the person who can recite the promises. The promises are free. The limitations cost people money.
Pick two
Every blockchain designer sits down with the same brutal, unbudging constraint. They call it the trilemma, and it goes like this.
You would like your network to be secure, so that attacking it is prohibitively expensive. You would like it to be decentralised, so that no single party can quietly change the rules. And you would like it to be scalable so it can handle many transactions quickly and cheaply.
Choose two. The third will suffer. Every time, without exception, no matter how much money you throw at it.
Bitcoin and Ethereum chose security and decentralisation. That is precisely why they are slow — it is not incompetence, it is the bill arriving. Solana pushed hard on speed and got it, magnificently, but running one of its validators requires expensive specialised hardware, which means fewer people can afford to run one, which means rather more centralisation than the marketing implies. Nobody is being dishonest here. These are genuine engineering trade-offs, made by clever people who understood exactly what they were surrendering.
And before anyone dismisses this as a crypto problem, it is worth knowing that it isn’t.
Why is this not blockchain’s fault
Back in 2000, a computer scientist called Eric Brewer proposed something that unsettled his entire field. In any distributed system, where a collection of computers is separated by a network that can fail, you may guarantee that the same data is seen. Or you may guarantee that the system always answers when asked. When the network splits, you cannot have both. It became known as the CAP theorem, and it was subsequently proved, not argued. Proved.
The blockchain trilemma is the same iron law, wearing a different hat. This is not an engineering failure awaiting a sufficiently brilliant graduate student. It is closer to a law of physics for anything built on computers that must agree with one another across distance.
I find that oddly reassuring, in the way gravity is reassuring. It tells you which promises to disbelieve. When somebody announces a chain that is simultaneously as secure as Bitcoin, as decentralised as Bitcoin, and forty thousand times faster, you now know to ask the only question that matters: what did you give up? If the answer is “nothing,” the answer is a lie.
The workaround that is actually working
If the main chain cannot scale without surrendering the very properties that make it worth using — then don’t scale the main chain. Build a faster layer on top of it.
That is Layer 2, and it is the most successful idea in the industry this decade. Thousands of transactions are processed quickly and cheaply on the main chain. Then a compressed summary is posted back for final settlement. The main chain stays slow, secure and authoritative. The layer above it moves fast and inherits that security.
Think of a bar tab. All evening, drinks are added to it instantly, with no card machine, no waiting, no ceremony. At closing time, a single payment settles the lot. The tab is Layer 2. The card network is the Layer 1. Nobody would dream of running a card payment for every gin and tonic, and now nobody needs to run a blockchain transaction for every trade.
It works. Ethereum’s Layer 2s have transaction fees from several pounds down to fractions of a penny, which is not a marginal improvement but a change in what the technology can be used for at all.
And, because I promised you the whole picture: most Layer 2s currently rely on a single centralised operator to decide the order of transactions. Decentralising, that is, to put it politely, is a work in progress. We fixed the speed by quietly borrowing back a little of the trust we set out to abolish.
The energy debate, argued honestly
Bitcoin’s electricity consumption is the most-cited criticism of this entire technology, and it deserves a proper answer rather than a defensive one.
Bitcoin mining consumes an enormous amount of energy, comparable to that of a mid-sized country. That is a legitimate concern, sincerely held by serious people, and I have no interest in waving it away.
The counterarguments are also serious. A growing share of mining runs on renewables and on stranded energy that would otherwise be wasted. Defenders point out that the traditional financial system, every branch, every data centre, every card network, every armoured van consumes staggering energy too. I should say plainly that these comparisons are contested and the methodology is often chosen by whoever commissioned it.
What I would add is the point that most of the argument misses entirely. This is now a debate about Bitcoin, not about blockchain. Ethereum’s switch to Proof of Stake in 2022 cut its energy use by over ninety-nine per cent, overnight, with no loss of function. The environmental question is a chain of deliberate design choices. Where you land on whether that choice is worth the cost is a matter for you, and reasonable people land in different places.
The hardest problem, which nobody mentions
There are hundreds of blockchains, and most of them cannot natively talk to one another. To move an asset from one chain to another, you need a bridge: you lock your asset on chain A and receive a representation of it on chain B.
Bridges are essential. Bridges are also where the money dies.
In March 2022, North Korea’s Lazarus Group drained roughly $625 million from the Ronin bridge by compromising five of the nine validator keys that guarded it. Nobody noticed for six days. The Wormhole bridge lost around $320 million. Nomad lost $190 million. And if the name Lazarus rings a faint bell, it should — the same organisation took roughly a billion and a half from the Bybit exchange in 2025.
Notice the pattern, because it is the single most valuable thing in this article. It is never the cryptography that fails. It is always a small number of humans holding the keys. A bridge is a honeypot: an enormous pool of locked assets, guarded by a handful of signatories, sitting in plain sight of the most sophisticated state-sponsored thieves on earth.
A financial system in which assets cannot move freely between chains is not infrastructure. It is an archipelago. Solving that without inventing new centralised bottlenecks is one of the genuinely open problems in this field, and nobody has cracked it.
So — revolutionary, or overhyped?
Honestly? Both, depending entirely on the claim being made.
Blockchain solves the problem of trust between strangers, at scale, without an institution in the middle. Demonstrably true. Running live for seventeen years, through crashes, bans, and the concerted attention of criminals and governments alike.
Everything should be on a blockchain, and traditional finance is about to collapse. Not supported by the evidence, the engineering, or the last decade of watching.
Here is the honest version. I would ask you to hold onto it. Blockchain is the best tool created for recording ownership and executing agreements between Institutions where permanence matters more than speed. For that problem, it is remarkable and possibly permanent. For nearly everything else, an ordinary database is faster, cheaper, greener, and vastly easier to fix at three in the morning when something has gone wrong.
I learned the expensive distinction in a different context years ago. I once chose a tool because it was elegant rather than because it fitted the problem, and spent a great deal of time and money teaching myself that the two are not the same. Beauty is not a use case.
That distinction is exactly what separates the informed participant from the person swept along by a cycle, wondering afterwards where the money went.
The whole series in one paragraph
A shared ledger, maintained by thousands of independent computers. Secured by cryptographic fingerprints that make any tampering instantly obvious. Agreed upon through economic incentives that make honesty more profitable than cheating. Extended by smart contracts that let the ledger follow instructions rather than merely record them — though it can never see the world outside itself, and must be told. It trades speed and simplicity for permanence and the absence of trust. Worth the trade in some situations. Emphatically not in others.
You now understand this technology better than most of the people who talk loudly about it. That is nothing. That, in fact, is the whole point of everything I write here: knowing exactly what you own, and knowing exactly what it cannot do.
Next: how to approach investing in any of this — carefully, unhurriedly, and with your eyes wide open.
This is me thinking out loud in your company — educational commentary, not financial advice. Capital is always at risk, and what you do next is gloriously your own affair.
The Jacqueline Brand — knowledge builds confidence, confidence builds wealth. This is editorial commentary for inspiration, not financial or professional advice. Always do your own research. The Collection
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