Do you need a blockchain? | TechCrunch

https://techcrunch.com/2018/04/19/do-you-need-a-blockchain/
Blockchain technology is set to have a profound impact on a wide variety of industries. Blockchain technology is still surrounded by its fair share of hype and uncertainty. It seems that the term blockchain has become a bit diluted as the hype has continued to bloom.

There is an inherent risk that managers eager to explore new technologies jump to conclusions without properly exploring alternative options. Go through decision models to see if makes sense to consider blockchain or not.

Blockchain differs from a database in many ways, but the most significant exception is the decentralized nature of blockchain. However, this feature comes at a cost especially on public blockchains: considerably slower than traditional databases and users must pay a fee for each “transaction”. So if performance and transaction speed and cost ate the most important factors, you most propably should stick with a more traditional database.

Thete are new private blockchains that promise benefits. Critics also argue that the term private blockchain is just a confusing name for a shared database. For example Estonia’s digital identity solution is an example of the use of the blockchain as a marketing tactic.
While there are many reasons to steer clear of blockchain technology, there are equally many potential valuable use cases.

12 Comments

  1. Tomi Engdahl says:

    Cryptocurrency’s Estimated Draw on World Resources Could Power Bangladesh
    http://www.electronicdesign.com/power/cryptocurrency-s-estimated-draw-world-resources-could-power-bangladesh?NL=ED-003&Issue=ED-003_20180502_ED-003_605&sfvc4enews=42&cl=article_1_b&utm_rid=CPG05000002750211&utm_campaign=17046&utm_medium=email&elq2=f8a135d001bd433e8c8c34e45863e79a

    Is the phenomenon of cryptocurrency sustainable? A number of factors come into play here, but as it expands, power consumption and requisite cost become the main issues.

    When it comes to mining cryptocurrency and how much power is consumed during mining operations globally, nobody knows for sure. However, based on varied utility costs alone, it’s estimated at 53.99 TWh, or enough energy to power the country of Bangladesh annually, according to the Digiconomist Bitcoin Energy Consumption Index—a website dedicated to providing in-depth analysis regarding cryptocurrencies.

    Cryptocurrencies are digital assets (currencies) designed for use as a medium of exchange in the same fashion as traditional assets or money. However, they use cryptography to secure transactions as well as control the creation of additional units and the verification of transfer assets. Most, such as Bitcoin and other altcoins, are decentralized, with control mitigated through blockchains. Blockchains are continuously growing lists of records that form blocks (i.e., ledger) containing a cryptographic hash (mathematical algorithm), which makes it tough to alter the data and therefore makes the digital currency secure.

    Reply
  2. Tomi Engdahl says:

    RSA yet to be sold on magic pixie dust qualities of blockchain
    https://www.zdnet.com/article/rsa-yet-to-be-sold-on-magic-pixie-dust-qualities-of-blockchain/

    Just because you can solve your problems with a blockchain, doesn’t mean you should, according to RSA CTO Zulfikar Ramzan.

    While the world rushes to slap a blockchain onto a growing number of applications to generate hype and excitement, RSA CTO Zulfikar Ramzan has told ZDNet that he is not convinced that many use cases of blockchain couldn’t be addressed by more traditional mechanisms, such as a database.

    “For example, we talk about like supply chain management, people tout that as a very classic blockchain use case,” he said. “But to me, that seems like that’s a shared database use case — and you know, it’s funny because people who don’t understand the security nuances don’t understand why a database is not worse than a blockchain, in fact I think in many cases it is better.”

    Ramzan said that in many cases, blockchain is a “heavy duty model” designed to address problems with a lack of trust, but often the solution has a number of trust assumptions built in. For instance, in the case of tracking an object, the process for assigning identifiers and adding the identifers to the blockchain need to be trusted.

    The CTO told ZDNet that blockchain is starting to be regarded as magic.

    “It’s become this magical pixie dust, where people think you can solve all problems, and yes, maybe you can use it to address a certain set of problems, but just because you can and doesn’t mean you should.

    “You can buy a sledgehammer to push a thumbtack into a wall. You could also just use your thumb. It’s a much cheaper solution, and probably better for other reasons as well. I think that’s where we are.”

    However, Ramzan was not prepared to write off blockchain totally.

    “I don’t want to discount that there will never be any applications, or there aren’t legitimate use cases where you could try blockchain outside of cryptocurrencies. But I think people who haven’t really spent time understanding the nuances will … use a buzzword to get people excited about technology.”

    Reply
  3. Tomi Engdahl says:

    Accessing Blockchain on ESP8266 Using the NodeMCU Board
    https://hackaday.com/2018/05/02/using-blockchain-explorer-apis-on-nodemcu/

    Blockchains claim to be public, distributed, effectively immutable ledgers. Unfortunately, they also tend to get a little bit huge – presently the Bitcoin blockchain is 194GB and Ethereum weighs in at 444GB. That poses quite an inconvenience for me, as I was looking at making some fun ‘Ethereum blockchain aware’ gadgets and that’s several orders of magnitude too much data to deal with on a microcontroller, not to mention the bandwidth cost if using 3G.

    Having imagined a thin device that I could integrate into my mobile phone cover (or perhaps… a wallet?) dealing with the whole blockchain was clearly not a possibility. I could use a VPS or router to efficiently download the necessary data and respond to queries, but even that seemed like a lot of overhead, so I investigated available APIs.

    As it turns out, several blockchain explorers offer APIs that do what I want. My efforts get an ESP8266 involved with the blockchain began with two of the available APIs: Ethplorer and Etherscan.

    Ethplorer (Github) responds with data to HTTP GET requests. Some key features are that it allows you to retrieve trading data like pricing and volume for both coins and tokens.

    Etherscan on the other hand focuses on more things that I’m interested in. It has some basic smart contract features like checking execution status, and in addition to HTTP GET requests it supports websockets for something approaching real-time alerting.

    Both services are presently free to use and can check Eth balances, transactions histories, and the other features you’d expect in this type of blockchain explorer. I chose Etherscan for this project because I wasn’t interested in price data and I thought of some fun things websockets would allow. Both services provide data in JSON format, which is quite convenient as we’ll see later.

    Reply
  4. Tomi Engdahl says:

    Simple Ethereum Vending Machines with NodeMCU
    https://hackaday.com/2018/05/10/simple-ethereum-vending-machines-with-nodemcu/

    Recently, we covered how to use the Etherscan API to query data (a wallet balance) from the Ethereum blockchain with NodeMCU. It’s a very useful method for retrieving information from a blockchain on embedded systems where storage and memory are an issue.

    It has some limitations though. Most notably, it’s polling the API at some interval to retrieve information whether it has changed or not.

    Simply send to an address via some method, and receive goods!

    It turns out we can do exactly that with NodeMCU using WebSocket. Like HTTP, WebSocket is a communications protocol that uses TCP connections (typically over port 80), but it allows full-duplex communication. In other words, you can establish a connection to a server, and send/receive messages without needing to poll the server.

    Accessing Blockchain on ESP8266 Using the NodeMCU Board
    https://hackaday.com/2018/05/02/using-blockchain-explorer-apis-on-nodemcu/

    Blockchains claim to be public, distributed, effectively immutable ledgers. Unfortunately, they also tend to get a little bit huge – presently the Bitcoin blockchain is 194GB and Ethereum weighs in at 444GB. That poses quite an inconvenience for me, as I was looking at making some fun ‘Ethereum blockchain aware’ gadgets and that’s several orders of magnitude too much data to deal with on a microcontroller, not to mention the bandwidth cost if using 3G.

    Reply
  5. Tomi Engdahl says:

    3 Obstacles to Moving Social Media Platforms to a Blockchain
    https://spectrum.ieee.org/tech-talk/computing/networks/3-obstacles-to-moving-social-media-platforms-to-a-blockchain

    On average, there about 10 million active sessions a day on Taiwan’s version of reddit, a 25-or-so-year-old bulletin board system called PTT.

    Last month, PTT’s administrators started developing a modified platform that could store data on distributed ledgers—permanent records shared among users themselves. Today, PTT’s servers hum on a National Taiwan University campus in Taipei

    If data is instead distributed across just enough independent entities, then the risk of censorship is much lower. And there’s another benefit: users would “own” their data and control their own privacy.

    Reply
  6. Tomi Engdahl says:

    6 Common Misconceptions About the Security of Blockchain Technology and Smart Contracts
    https://www.tripwire.com/state-of-security/risk-based-security-for-executives/connecting-security-to-the-business/6-common-misconceptions-about-the-security-of-blockchain-technology-and-smart-contract/

    As blockchain technology becomes an increasingly popular option for companies searching for secure business solutions, we’re seeing more use cases for the network and smart contracts.

    A smart contract is a computer protocol that is used to digitally facilitate, verify and enforce the performance of credible transactions without the need for a third party. When operating on a blockchain network, smart contracts are utilized to verify or enforce a set of promises through various digital security methods.

    However, there are a wide range of misconceptions about the security that blockchain and smart contracts offer.

    Blockchain Misconceptions
    THE MAIN BENEFICIARIES OF BLOCKCHAIN TECHNOLOGY ARE CRIMINALS
    When blockchain technology first emerged into the mainstream, it was commonly portrayed as a hub of criminality, particularly on the dark web.

    BLOCKCHAIN IS UNHACKABLE AND UNMODIFIABLE
    One misconception that is commonly spread about blockchain technology is that it’s completely unhackable and unmodifiable. Although the blockchain is one of the most secure options available to businesses, no system is 100 percent safe from being hacked or altered. In theory, any person or group within a blockchain network is capable of gathering enough mining resources to take control, though it is highly unlikely.

    A BLOCKCHAIN NETWORK CAN BE SHUT DOWN BY THE GOVERNMENT
    But since a blockchain network is decentralized and not able to be controlled by a single entity, it’s virtually impossible to shut down unless every network participant stops working within it.

    Smart Contract Misconceptions

    SMART CONTRACTS ARE LEGALLY BINDING CONTRACTS
    A smart contract is software code within a program that follows the instructions set forth by an agreement between two parties. As explained on Coindesk, smart contracts essentially act as a list of “if/then” statements that operate automatically when a specific condition or promise is met. However, there is nothing legally binding about them

    SMART CONTRACTS OPERATE WITH COMPLETE AUTONOMY
    smart contracts such a secure solution is that they can only be executed if a transaction or message is sent to the smart contract.

    ALL SMART CONTRACTS HAVE THE SAME FEATURES
    Unlike Ethereum, most blockchain networks are either not capable of operating with smart contracts or only do so in an extremely limited capacity. On top of that, smart contracts possess completely different features depending on the blockchain network they’re running on.

    Conclusion
    It’s no surprise that the recent emergence of blockchain technology and smart contracts has created misconceptions among the business world and general public.

    Reply
  7. Tomi Engdahl says:

    How I became Leonardo da Vinci on the Blockchain
    https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vinci-on-the-blockchain/

    One in particular caught my attention. On the surface it seems to solve an important economic problem – art forgery and provenance.

    By putting your artwork on the “BitCoin Blockchain”, Verisart will ✨hand wavy magic✨ increase the trust in art dealers and reduce fraud.

    That’s a pretty neat idea. A distributed public ledger of who I have sold my art to.

    what if I sell a fake and keep the original in my Underground Vault?

    There’s no way to permanently attach a digital certificate to a physical work of art.

    Incidentally, this is the problem with all the startups claiming the blockchain will revolutionise the integrity of global logistics markets. Sure, you can slap a QR code on a crate – but nothing stops an unscrupulous middle-man from replacing or adulterating the contents of the crate.

    Long story short, I convinced them that I painted the Mona Lisa. An excellent situationalist prank. Much avant-garde, so postmodernism.

    Reply
  8. Tomi Engdahl says:

    Blockchain: Not just for cryptocurrency
    There’s a lot more to blockchain than Bitcoin.
    https://opensource.com/article/18/3/blockchain-not-just-cryptocurrency?sc_cid=7016000000127ECAAY

    A colleague and I sat down and said, “we need to figure out this blockchain thing,” because we didn’t even know how it was relevant, let alone what problems it might be able to fix.

    Blockchain basics
    A blockchain is a distributed set of data that uses cryptography to verify and secure that information. Each piece of data in a blockchain is called a block, and the blockchain is the entire set of that data.

    A blockchain is a distributed set of data that uses cryptography to verify and secure that information

    Reply
  9. Tomi Engdahl says:

    Blockchain in action: 5 interesting examples
    https://enterprisersproject.com/article/2018/7/blockchain-action-5-interesting-examples?sc_cid=7016000000127ECAAY

    We look at five areas where blockchain projects are showing tangible progress, including supply chain, real estate, and healthcare

    Reply
  10. Tomi Engdahl says:

    Blockchain evolution: A quick guide and why open source is at the heart of it
    https://opensource.com/article/18/6/blockchain-guide-next-generation?sc_cid=7016000000127ECAAY

    From Bitcoin to the next generation of blockchains.

    Reply
  11. Tomi Engdahl says:

    Many of your thoughts on cryptosystems are not true

    The world is slowly moving towards a completely digital monetary system and cryptographic currencies have an important role in this development. The company called GlobalData reminds us that many of the allegations associated with the CRM are not true.

    In its “Cryptocurrencies – Thematic Research” survey, GlobalData says that while block logs and DLT (Distributed Ledger Technologies) play an important role in modernizing financial systems, thinking that the boulders themselves have brought tremendous savings, is an imagination.

    - Many of the arguments put forward by the crypto curators are not true. It is alleged that the crypt sword will speed up financial transactions, remove the middlemen from the deal and be free, but none of these is true, says GlobalData analyst Gary Barnett.

    Chryptovegoods are not free. At its peak, the price of a Bitcoin transaction exceeded $ 50, which was not very well matched with $ 25 groceries. Although the purchase price is about one dollar when there is no load on the web, the amount will inevitably increase as the volumes rise again.

    Still, no cryptographic currency will be accepted and exchanged widely.

    The big problem is that the crypto currencies can not be scaled. Visa system can support 24,000 transactions per second. In Bitcoin, it is difficult to access more than 10 transactions per second. The only thing close to the Visio’s readership is the Ripple

    Source: http://www.etn.fi/index.php/13-news/8177-monet-luulot-kryptovaluutoista-eivat-pida-paikkaansa

    Reply
  12. Tomi Engdahl says:

    One of our observations of existing systems is that consensus operations are very expensive. our network protocol design allows compute committees and storage committees to process transactions without relying on heavy-weight consensus protocols.”

    Source: https://techcrunch.com/2018/07/09/distributed-ledgeroasis-labs/?utm_source=tcfbpage&sr_share=facebook

    Reply

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