David Gerard’s Attack of the 50 Foot Blockchain and the Case Against Cryptocurrency: A Comprehensive Critique

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Introduction
David Gerard’s Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts (2017, updated 2020) is a seminal work of skepticism in the cryptocurrency space. Gerard, a journalist and vocal critic of blockchain technology, dismantles the utopian narratives surrounding Bitcoin, Ethereum, and decentralized finance (DeFi), arguing that the industry is built on hype, speculation, and systemic flaws. This essay synthesizes Gerard’s core arguments, updates his critiques to reflect developments through 2024, and examines his dismissal of Bitcoin as a viable solution for macroeconomic challenges like U.S. debt or as a global reserve currency. By exploring technical, economic, and ethical dimensions, this critique underscores Gerard’s central thesis: blockchain is a solution in search of a problem, and its adoption risks amplifying fraud, environmental harm, and financial instability.

I. The Hype vs. Reality of Blockchain Technology

Gerard opens his critique by challenging the foundational myth of blockchain as a revolutionary innovation. He argues that proponents overstate its potential while ignoring its inefficiencies and impracticalities.

Decentralization as a Myth
Blockchain’s purported decentralization is, in practice, a facade. Bitcoin mining, for instance, is dominated by a handful of industrial-scale operations in regions with cheap electricity (e.g., Texas, Kazakhstan). Gerard notes that this centralization contradicts the technology’s egalitarian ideals and creates systemic risks, such as vulnerability to regulatory crackdowns or collusion among mining pools.
Limited Practical Use Cases
Despite promises of disrupting industries like finance, supply chains, and healthcare, blockchain has failed to deliver scalable solutions. Enterprise projects like IBM’s Hyperledger have largely fizzled, while supply chain pilots (e.g., Walmart’s blockchain tracking) remain niche and redundant compared to centralized databases. Gerard concludes that blockchain adds unnecessary complexity without tangible benefits.

II. Cryptocurrency as a Vehicle for Fraud and Speculation

Gerard’s most scathing critiques target the cryptocurrency market’s culture of speculation, fraud, and regulatory arbitrage.

The 2017 ICO Bubble
The 2017 Initial Coin Offering (ICO) boom saw startups raise billions via unregulated token sales, many of which were outright scams. Gerard dissects projects like BitConnect and OneCoin, which collapsed after operating as Ponzi schemes. He argues that ICOs exploited regulatory gaps, with issuers making false promises of returns while avoiding accountability.
The 2021–2022 NFT and “Web3” Frenzy
The non-fungible token (NFT) boom of 2021–2022 repeated the ICO cycle, with speculative mania driving prices for digital art and collectibles. Gerard dismisses NFTs as a “scam” due to rampant wash trading, plagiarism, and environmental costs (e.g., Ethereum’s energy-intensive proof-of-work model at the time). Similarly, he critiques “Web3” as a rebranding of blockchain hype, noting that decentralized autonomous organizations (DAOs) and DeFi platforms like Celsius and Terra/Luna collapsed under poor governance and fraud.
Market Manipulation and Volatility
Gerard emphasizes that cryptocurrency markets are rife with manipulation. Stablecoins like Tether (USDT), which claim to be backed 1:1 by reserves, have faced allegations of fractional backing and opaque accounting. Meanwhile, Bitcoin’s price swings—losing over 70% of its value in 2022—demonstrate its unsuitability as a stable asset.

III. Bitcoin’s Technical and Environmental Failings

Gerard reserves particular disdain for Bitcoin’s proof-of-work (PoW) consensus mechanism, which he views as both technically flawed and ecologically catastrophic.

Energy Consumption and Environmental Harm
Bitcoin mining consumes as much electricity as entire nations (e.g., Argentina or Norway). Gerard lambasts this waste, noting that miners often rely on fossil fuels (e.g., coal in Kazakhstan, gas flaring in Texas). Even “green” mining initiatives, such as using hydropower in China, divert renewable energy from more critical uses, such as powering homes or decarbonizing industries.
Security Through Waste
Bitcoin’s security model hinges on miners expending vast resources to deter attacks—a system Gerard derides as “security through waste.” The network’s hash rate, while high, depends on perpetual mining profitability. When prices crash (e.g., post-2021), smaller miners shut down, centralizing control among industrial players and increasing vulnerability to 51% attacks.
The Halving Trap
Bitcoin’s quadrennial “halving” events reduce block rewards, squeezing miner revenue. Gerard argues that unless transaction fees rise exponentially, mining will become unprofitable, leading to a death spiral in hash rate and security. This deflationary design, he contends, prioritizes artificial scarcity over functional utility.

IV. Bitcoin as a Solution for U.S. Debt or Reserve Currency: A Dangerous Fantasy

Gerard dismantles claims that Bitcoin could address U.S. debt or serve as a global reserve currency, calling such ideas “techno-libertarian wishful thinking.”

The Deflationary Trap
Bitcoin’s fixed supply (21 million coins) makes it inherently deflationary—a disastrous trait for a modern currency. Deflation incentivizes hoarding, stifles spending, and exacerbates debt burdens (as nominal debts grow in real terms). Gerard contrasts this with fiat systems, where central banks adjust monetary policy to manage inflation and stimulate growth.
Volatility and Instability
Reserve currencies require stability to facilitate trade and store value. Bitcoin’s wild price swings—driven by speculation and market manipulation—render it unfit for this role. Even El Salvador’s 2021 experiment with Bitcoin as legal tender backfired, with technical glitches, public resistance, and massive losses for the government.
Lack of Institutional Adoption
No major economy or central bank has seriously considered adopting Bitcoin as a reserve asset. Instead, institutions like the IMF and Federal Reserve view it as a speculative commodity. Gerard attributes this to Bitcoin’s technical limitations (e.g., slow transaction speeds) and regulatory risks (e.g., sanctions evasion).

V. Post-2020 Validations of Gerard’s Critique

Recent events have reinforced Gerard’s arguments, underscoring the crypto industry’s fragility and recklessness.

The Collapse of FTX and Terra/Luna (2022)
The implosion of Sam Bankman-Fried’s FTX exchange and Do Kwon’s Terra/Luna stablecoin project revealed systemic fraud and poor governance. FTX misused customer funds for risky bets, while Terra’s algorithmic stablecoin UST failed catastrophically, wiping out $40 billion in value. Gerard argues these collapses exemplify crypto’s “negative-sum” economy, where profits flow to insiders at the expense of ordinary investors.
Regulatory Crackdowns
Increased scrutiny from agencies like the SEC and CFTC has validated Gerard’s calls for oversight. Lawsuits against Binance and Coinbase for operating unregistered securities exchanges highlight the industry’s disregard for compliance. However, Gerard remains skeptical that regulation alone can fix crypto’s structural issues, noting that bad actors will always exploit loopholes.
The Persistence of Greenwashing
Bitcoin miners continue to rebrand themselves as environmentally friendly, despite evidence that renewable energy projects (e.g., ERCOT’s Texas grid) prioritize mining profits over public benefit. Gerard argues this greenwashing distracts from the urgent need to reduce energy consumption.

VI. Conclusion: Blockchain as a Zombie Technology

Gerard concludes that blockchain is a “zombie technology”—kept alive by hype cycles and speculative greed rather than utility. Its proponents, from libertarian idealists to profit-driven venture capitalists, ignore its flaws while promising disruptive change. Yet, after 15 years, Bitcoin remains a speculative asset with no mass adoption, Ethereum’s transition to proof-of-stake (PoS) has not resolved scalability issues, and DeFi platforms remain prone to hacks and fraud.

Final Takeaways

Blockchain’s inefficiency, centralization, and environmental harm outweigh its theoretical benefits.
Cryptocurrency markets are inherently unstable, driven by speculation and manipulation.
Bitcoin’s design flaws disqualify it as a solution for macroeconomic challenges.
Regulatory oversight is necessary but insufficient to address crypto’s systemic risks.

Gerard’s work serves as a cautionary tale against techno-utopianism, urging society to confront real-world problems with proven tools rather than speculative gambles. As the crypto industry lurches from one bubble to the next, his critiques remain a vital antidote to its myths.

References

Gerard, David. Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts (2017, 2020).
Gerard’s blog (davidgerard.co.uk) and contributions to Naked Capitalism.
SEC filings, court documents, and investigative reports on FTX, Terra/Luna, and Tether.