Jesse Frederik wrote a nice article over at The Correspondent which sums up what most of us in the technology space have been thinking for a long time. That thought is that blockchain technology is one of the most over-hyped technologies of the past decade or so. While the article is a little light on the technical details of blockchain concepts, its point is valid. Point to a situation outside of a crypto currency where blockchain technology is being used where it could not have been just as easily done by an existing technology. Not only that, but the existing technology likely is higher performing and easier to maintain. Ultimately I think Ehud Gavron over on Slashdot sums up the challenge with blockchain not fitting into most applications well with his comment written in the style of a press release:
– new database
– stores records forever
– no purging of old records, obsolete records
– guaranteed to grow in size forever
– can’t edit records
– sequential processing with complex calculations so it’s not Order(1) or O(n) or even O(n^x) but a complex polynomial that grows by yet another O(n^y) each time another entry is added
– guaranteed to always get slower over time — it’s the nature of cumulative calculations to verify the data each and every time it’s accessed
Ehud Gavron via Slashdot
Some of the facets of blockchain are quite handy, such as not being able to modify a record once it has been written. Immutable records are very handy when it comes to transactional ledgers or document custody chains. The issues really start to come in when you can’t prune records off the end of the chain, when you need to find more and more systems to be peers to verify the chain, and when the number of transactions being processed hits the millions or billions per day. It no longer makes sense to bother with blockchain, you may as well go back to a tried and true data storage methodology where you can set field level permissions on data, prune data when needed, and not require substantial processing power to verify every transaction.
Don’t get me wrong, I think blockchain has a role to play in the future of data transmission and the management of the chain of custody for electronic records. Being able to track a contract document from creation to full execution where all parties agree it is in the correct state is very valuable. However, many people think that something with “blockchain inside” must be better than something without it baked in. Others, like the town mentioned in Jesse’s article, go so far as to ignore it when the developers of an app try and tell them they are not using blockchain. After all, how could the tout how advanced they are if it is just some old fashioned database application?
In the end, the moral of the story is use the right technology for the problem, not try and make the problem fit the technology. Blockchain isn’t magic, it won’t solve all your problems, and when your technology staff tell you it isn’t needed to solve a business problem, listen to them. When blockchain is the right answer, they will let you know.