Cryptocurrencies: a failed prophecy
Once upon a time, a prophet appeared into the world.
They spoke of a LEGEND...
A future founded on 3 pillars.
Decentralization,
Security,
Scalability.- A bad attempt at paraphrasing the Legend of Delta Rune
Cryptocurrencies. We know them. Some of us love them, others not that much. They offer a way to make transactions between 2 individuals securely [citation needed], without relying on any central system[citation needed], while at the same time being scalable[citation needed].
(De)centralization
The first cryptocurrent, Bitcoin, was created with the intent of not having to rely on any central entity/authority, instead relying on miners to ensure the authenticity and secure of the transactions. In exchange, the miner that is lucky enough to have mined a block gets newly minted Bitcoin and all the block's transaction fees. However, since there are probably thousands of miners out there and only 1 block can be mined on average every 10 minutes, they quickly started forming pools, where the mining reward is split among the members of a pool if that pool happens to mine a block. We can see that for the better part of the last 3 years, only 3 mining pools have mined over half of all Bitcoin blocks, with the top 5 mining more than three quarters of all of them. This, alongside the fact that exchanges hold up to 10% of all mined Bitcoin, and also taking into account, Satoshi has about 5%, and I am sure that at least the majority of Bitcoin that haven't moved since 2015 can be considered lost, which worsens the situation, since the more Bitcoin we consider lost, the more value all the others get, and thus the more the power of exchanges increases. Oh, and 0.01% of Bitcoin addresses control more than half of all the Bitcoin supply (active or dormant) (source: https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2021.730122/full).
Secure? It depends
Blockchains themselves can be considered secure, since they are cryptographically tied to each other with a secure hashing algorithm. Bitcoin uses two SHA-256, making it virtually tamperproof. However, there are other kinds of security issues with cryptocurrencies.
The power of consensus
A blockchain is actually a huge graph of blocks that yes, are tied to each other cryptographically, but it is up to the network to choose which chain is considered to be "the blockchain" (that's why transactions that have made their way into a mined blocked are sometimes considered to be unconfirmed until they are enough blocks deep into the chain). This can cause forks in the blockchain, either by accident or intentionally. Of the second kind, most of them are normally because of disagreement within the community, leading to situations like Bitcoin Cash. There are and some more controversial takes, such as The DAO, which was supposed to be a DeFi thing, but because it wasn't properly written, a malovalent actor got their hand on a big part of the Ethereum supply. In the end, a hard-fork was made, which means that the Ethereum client code was altered to revert the state of the blockchain. This action remains to this day pretty controversial, while it also raises questions about the supposed immutability of cryptocurrency blockchains.
Immutability you say?
Because the blockchain is treated as immutable, at least when the big fish say that it is, it is possible to lose your entire stash of crypto by sending it into an inaccesible (random) address, essentially freezing/burning that amount. If that happens by accident to you, there's nothing you can do. In the normal world, you could contact you bank and maybe they would recompense you, but with cryptocurrencies YOU are the bank, so it is your fault if all your money is lost.
51% attack
51% attacks happen when a single actor has at least 50% of the mining power in a network. That power can then be used for things like blocking new transactions or double-spending (also known as money-printing). Monero just recently faced such an attack, where apparently 6 blocks were reordered, indicating that Qubic, the entity behind the incident, has established significant control over the Monero network.
Scalability
Visa says they process 80 billion transactions annually, or about 2.5 thousand every second. Bitcoin on the other hand can do 3 to 7, almost a thousand times less transactions. Cryptocurrencies are limited by their block size, and that issue is what changes like SegWit tried to solve without much success. So-called layer-2 networks try to solve this issue, with the most prominent one being the Bitcoin Lightning Network, but yet even that has its own issues, like needing at least 2 in-chain transactions for each 2-person channel, as well as having to put a fixed amount of Bitcoin in that channel which then moves back and forth. Tell me, how useful would that be in the real world where annually we also people exchange money with hundreds of legal entities, usually 1-way?
Waste of power
Bitcoin uses a proof-of-work (PoW) algorithm to ensure the security of its block. Simply put, everyone tries to guess a correct random number while wasting as much electricity as possible. As of September 2025, the Bitcoin network consumes as much electricity as a small country for no actual good reason. Ethereum was on a similar pace with Bitcoin, but since they switched to a new proof-of-stake (PoS) algorithm, their energy consumption in almost zero. Why doesn't Bitcoin do that and instead it keeps wasting electricity, a precious good during our times, for a network that processes 7 transactions per second?
Tied to nothing
Bitcoin (and most cryptocurrencies for that matter) have a floating exchange rate, that means they are tied to nothing. The value of cryptocurrencies is dependent on the mood of the market, since there is no actual demand for most of them and their exchange market is based purely on speculation, just like NFTs. On that note, cryptocurrencies are also pretty prone to manipulation
It didn't have to be like this
Satoshi vision was of a scalable decentralized network where people could exchange money securely and anonymously. Whether or not that is possible or not is not relevant. What matters is that, 16 years latet, Bitcoin and cryptocurrencies in general have not fulfilled even one of these promises. Yet, it is treated as a means to lander money, obfuscate criminal activities and print money (see Tether). Whether cryptocurrencies will stay as they are, disappear for good or go mainstream, only time will tell. Nevertheless, the prophecy doesn't seem to be fulfilled any time soon.