Blockchain technology: when is it really useful?
Blockchain

Blockchain technology: when is it really useful?

By Stefano Cavalli - 11 Aug 2019

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A topic that is always the subject of debate concerns the delicate question of the real utility of the blockchain applied to different sectors. These are some of the points to take into account when considering whether or not it makes sense to implement this technology:

  • If the goal isn’t to eliminate the risk of double-spending and an intermediary, there’s no need for a blockchain;
  • If it’s not difficult and expensive to write inside the blockchain then it won’t stay decentralised for long;
  • If the blockchain used is not decentralised, it will be corrupted sooner or later.

Blockchain technology: the origins

The blockchain is often presented as the technology underlying bitcoin. However, this description was not used by Satoshi Nakamoto in the original whitepaper or in the first posts published in the community. This is probably because Nakamoto considered the blockchain as an integral part of a single system.

So, there really is no universal and recognised definition of blockchain technology. Nevertheless, some terms are recurrent in the various presentations made to the public by all the experts around the world.

Transaction log, decentralisation, peer-to-peer network, security and immutability. These are the most used keywords when talking about blockchain. By examining these features in a non-technical way, it is possible to arrive at a definition that is easy to understand, without generating further confusion among users who approach this sector.

Blockchain technology provides a solution to the double-spending problem. This leads to a great breakthrough, namely the creation of a system of digital value transfer over the Internet, without intermediaries. In traditional systems, this intermediation is a compromise between security and ease of use. In other words, it allows transactions to be carried out easily at the same time, but it is subject to counterparty risks.

Blockchain: a secure, immutable and distributed transaction ledger

In addition to providing a chronological order of transactions, the blockchain can be used to store non-payment related data

These are notarization services that can be used in the future to replace current certification procedures.

There are several areas of application in which blockchain solutions are being promoted. In most cases, however, it would be preferable to use simple databases, which are cheaper and more efficient.

Alternatively, it is possible to rely on DLTs (Distributed Ledger Technology) for their decentralisation of the ledger, although in reality, they have little to do with the original concept of blockchain.

Paradoxically, today the blockchain seems to have become the solution to problems that do not exist. The multitude of projects that are born under the name ‘blockchain’ and which do not add anything really innovative are a major source of misunderstandings and misinformation. Users are the ones who suffer the worst consequences, losing track of the true and unique revolutionary significance of this technology.

The goal, according to an article published by Bitcoin France, is to shed some light on the different definitions, in an attempt to clarify what can be done with the blockchain and what, not only is impossible but also inconvenient and in some cases harmful. Greater clarity will also allow users to discern between truly innovative and useful projects and those less worthwhile.

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