blockchains: What you get for free with it in 2021

What you get for free with blockchains:

Over the past year, I have found many blockchains proofs of concept that take existing business ideas or challenges and apply a specific technical design (blockchain) to the solution. The usual problem/solution decision is reversed:

Sure, I’ll probably be a little melodramatic, but let’s look at the subtleties. I always thought, “Yeah, you can use a blockchain for this use case, but a normal database can, so why to use a blockchain?”

To understand some of the reasons:

1. Experiment: Because companies want to experiment with technology in a practical way to get familiar with blockchains.

2. Free: Today’s open-source blockchain solutions offer out-of-the-box stuff that you would otherwise have to code yourself. But remember the hidden costs.

Let’s explore these ideas. If the following gets too difficult, read a brief introduction to blockchain technology first.

1. Experience

The easiest way to try out new technology is to solve a known problem and see if a solution can be built on the new technology. You know what the outcome should be and you also more or less know the limits of the problem. You then create the new technology solution and compare the pros and cons of old and new technology solutions.

With new technologies or paradigms, it is difficult to find new use cases because we are committed to identifying problems in certain shapes and sizes. For example, we know what computers can automate because we’ve seen automation happen, and so we know how to look for problems that automation can solve. I don’t think we have blocks

With blockchains, the only solutions we’ve seen so far are cryptocurrencies (bitcoin) and recently some experiments with smart contracts on Ethereum. That’s why we’re looking for similar issues with dematerialized assets, such as inventory clearance, cash payments, and loyalty points. Creativity is needed to think about what this technology can still be used for, so let’s move on to the easy-to-understand issues.

2. Free

This is where it gets a little more interesting. There are many open-source projects that use distributed blockchains and ledgers, which may provide benefits that may not be available elsewhere.

Some of the free deliveries are because the blocks themselves provide benefits, and others because the software involved with the blocks is open source, so you can use free resources that someone else has coded. There are also some additional benefits to some types of blockchain that have an industrial logic layer built into the database replication process.

What do ready-made blockchains offer?

Probably the greatest benefit of distributed ledgers is the ability to agree on facts and processes between entities without unilaterally changing a unit.

Turnkey Business Benefits

With existing blockchain solutions such as Eris:DB and MultiChain (and several other platforms), you get the following benefits without any additional configuration:

Timestamp events are aggregated into different entities that can be hostile or untrustworthy.

Catastrophic data loss becomes a problem due to constant replication between all participants.

You can indicate that the data has not been unilaterally tampered with. Substantial coordination is required to manipulate data that has already been written and replicated in a blockchain.

If digital signatures are used to initiate transactions and keys are handled with care:

• Ability to prove authenticity (who started this transaction?)

• Undisputed (hard for participants to deny responsibility)

For digital tokens (which represent physical objects or are themselves dematerialized assets), if you use the bitcoin transaction paradigm “UXTO”, you get:

• Full history traceability

• Robust business logic validation that lets you spend only what you get

• A guaranteed group solution when the same signal is sent to two people at the same time

• Primary transactions: phased payments continue or go together. There is no risk of bone failure (known as the “Herstatt risk”). This includes one-time payments to multiple recipients or the exchange of funds

Technical advantages “out of the box”

Immutability (well, three things)

Blockchain participants can quickly and easily verify the sanctity of their data by comparing a single text (a recent block hash) with another participant’s records.

Attempts to modify historical data are not accepted by other nodes.

• Nodes will attempt to reboot into the network if changes are made to historical data

Learn more about immutability in a blockchain.

Check the consistency of distributed data – essentially the system to avoid duplication of costs. A blockchain system automatically rejects conflicting transactions entered into multiple network nodes at the same time, preventing data inconsistencies such as negative balance.

Advanced cryptographic verification mechanisms: The ability to orchestrate the creation, signing, and transfer of transactions involving multiple parties. It is extremely useful for simulating real-life scenarios where multiple people or organizations need to perform a specific process. Examples include payments that require multiple subscribers but can be generalized to any business process that requires the participation of multiple people. Digital signatures and keys representing the identity of the parties (people, companies, machines, devices) are an integral part of these mechanisms.

Close

Technology gives us the tools to help us do what we want to do. Blockchains are just one of the tools and can be a useful solution. Start with your goals for each business problem and find out what solutions might work. Depending on your needs, you can achieve the same goals using centralized databases or blockchains.

There is little overhead to running a blockchain-style distributed database. With new open source tools available online, like MultiChain and Eris, you can install a blockchain and get started on one or two assignments, and you certainly don’t need to manage large data centers to retrieve characters from a private network.

Make the decision based on the normal criteria of what’s important—typically cost, scalability, support, resiliency, available experience, technical risk, etc.

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