Is Blockchain a Silver Bullet?
(By Shivkumar)
Blockchain can help solve some specific business problems, but it is not the universal answer to all business needs. Given time and lot of experimentation it can be a silver bullet to number of industries and businesses.
Lets look at some of the use cases where Blockchain may not be the right answer:-
Data confidentiality requirements are really strict. Blockchain can handle privacy and confidentiality but by design Data is distributed on nodes across different location and countries. Even data is encrypted, most regulation entities for data protection do not recognize Blockchain solution as compliant to their countries data protection requirement.
The use of external services is required to process transactions. Blockchain transaction are handled and processed by smart contracts. Smart contract ensures consistent execution over time but they are not meant to access external source evolving data. Smart contract should be deterministic, does not rely on external data and transaction operation performed on different nodes should return the same result.
A large amount of data must be stored on the ledger. The beauty of shared ledger is that everyone gets access to information it contains on Blockchain. But replication has cost. If information stored is quite large will result in high transaction rate which is critical. In these scenario blockchain may not be the most efficient solutions.
The business processes change frequently. Businesses are predefined and stored on the network of Blockchain. If rules to govern transaction is changed frequently than Blockchain is not a right scenario, as ability to constantly apply changes is limited.
Digital payment at scale. In scenario whether Bitcoin can solve digital payment at large scale? Energy consumption used by mining coins is equivalent to use of 1 week power of US household. I am not any Bitcoin expert but the research are pointing towards the use of methods for Bitcoin in Digital payment arena.
There are many other reasons on the above which might make us think that Blockchain is not a silver bullet?
The above thoughts is not suggesting that Blockchain is a bad thing. If you need to keep DATA safe, instantly available to everyone, who is authorize to see, than Blockchain makes a lot of sense. Blockchain needs a lot of planning before you think to shift your whole business processes.
Some take away from Blockchain technology is plan what to use it for, who will access, how you will control the access and how you will protect it.
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Next Topic on Blockchain Technology :- Benefits of Blockchain Technology.
