Blockchain is a technology which exploded with the success of Bitcoin and the subsequent cryptocurrency revolution. While initially it was merely known as the source-code of cryptocurrency, the world has now realized its potential beyond the realm of virtual currencies and with each new day, we get to see news about innovations made by blockchain development companies.
However, while most talk about how Blockchain can do great things, nobody seems to talk or think about what it actually takes to do for something related to blockchain. Blockchain is one thing, and the process of developing a blockchain, i.e., Blockchain Development is another.
6 Benefits of Blockchain development to Industries
You may ask like a grumpy child would do, “What do I have to do with Blockchain development? I’ll just hire a Blockchain development company for the development process. All I want is a Blockchain in my business.” Right? Well, this is perhaps the case for most business owners unaware of everything it actually takes for Blockchain development. The same also applies for those who may not know about a few limitations of this technology.
So here’s a rundown of 5 things you need to know about Blockchain development. This isn’t a rundown presented from a developers’ point of view, but in fact something to be well-known to business owners, entrepreneurs and managers.
1. You can’t fit Blockchain to everything
If you ever Google the term Blockchain, which i’m sure you have. Chances are that you might have come across a myriad blogs discussing potential use-cases of Blockchain. What many might not realize is; while Blockchain certainly can be used beyond cryptocurrency, it still has a boundary beyond which it doesn’t have feasible use cases.
Ideally, a business must choose to invest in Blockchain development only if they have any of the following requirements:
The need to create a decentralized network: Most business of today wouldn’t want that. The customers definitely would.
The need to maintain transparency of business activities: Once again, most businesses wouldn’t want it unless they aim to boost loyalty and goodwill at the cost of revenue.
The need to protect data/prove data tampering: One of the key benefits of Blockchain. A change in one dataset affects the whole network. There’s almost no way for anyone to tamper data within a blockchain and get away with it.
2. Storing Data in Blockchain isn’t so easy
Since most Blockchain are designed for cryptocurrency, the most common models for storing data are in the form of transactions. For example, if “A sends money to B” is a transaction, the data stored on the blockchain would include the address of both A & B along with the amount of money sent by one party to another.
The problem here is that when data isn’t of a transactional nature, the common Blockchain networks aren’t too useful. However, there is a solution to this. But I won’t go too deep to make it easier to understand. The solution is the use of protocols which can be used to attach data to a transaction.
However, these are not utilized by all Blockchains. There are several other methods, but each method either takes high costs or simply cannot store large amounts of data. Fortunately enough, some unique forms of storing data; such as those which involve storing raw data in the form of hashes; could do well to balance costs and get the work done.
Another major concern when it comes to data storage is the fact that any additional data added to a blockchain network isn’t just stored at one place. Instead, it is distributed to all participating nodes in a Blockchain which requires some amount of hardware power and resources.
Also read: How can Smart Contracts in Blockchain Redefine Value exchange
3. Some things are Meant to be Deleted
One of the major promises of Blockchain is that of its secure nature, wherein no transactions and data can be deleted. This creates a set of societal problems, one of which is that the personal and confidential data of users is sent to all nodes within the network. This data is of an encrypted nature so cannot be accessed so easily. Additionally, in public Blockchain networks, this can be acceptable given its completely decentralized nature.
But the problem here is that most businesses won’t work on a public blockchain! These would run on private blockchains of a mildly centralized nature. And if you’re a business owner, your enterprise would be subject to certain guidelines of the government and other interfering parties.
Take the new GDPR rules for example; which has forced a myriad companies to either remove, or allow users to manually remove some of their own data if they want to. If government or customer influenced CSR guidelines are enforced on Blockchain networks, it would only create a new set of problems for businesses to deal with.
Complete transparency is something that is debated now, and will be debated for a long time to come.
4. Blockchain takes Energy and Resources, a lot of it
To put across the point simply, Blockchain stores its data within all nodes in the network. The validation, transfer and authentication of data on Blockchain networks not only takes time, but also consumers large amounts of hardware power and energy resources. It has been claimed that keeping the Bitcoin network running itself has consumed as much energy as 159 of the world’s nations!
But that was the state of cryptocurrency working in a public Blockchain network, and the same problem applies with every public Blockchain. In case of privatized blockchains which is what most organizations will use, the nodes are deployed internally and thus may not consume too much power. However, it still does require a lot of resources, and that can’t be ignored.
Also read: The best ways of implementing Blockchain Technology beyond Cryptocurrency
5. Blockchain is Slow
Perhaps one of the most important facts to understand about Blockchain is that it is slow. Yes, it employs new and revolutionary ideas such as proof-of-state and proof-of-work. Yes, these are revolutionary in terms of creating a transparent and decentralised environment. But the problem that lies beneath such promises is a slow and steady processing capability which consumes an incredible amount of energy resources.
With the current progress in Blockchain development, Blockchain is nowhere near the speed, scalability and efficiency levels of the existing transaction and financial systems. The need for cryptographic verification of transactions in proof-of-state, and the need for power consuming hardware to implement proof-of-work make Blockchain a slow and steady, but a powerful turtle which can win the race; but in this particular case, the rabbit won’t halt its pace soon enough.
So does your business really need Blockchain development today?
The running rabbit of the existing transactional, database storage and financial systems is yet to get complacent of its power. So the turtle of Blockchain still needs time, and a lot of development before it catches up. However, this isn’t to say that an investment in Blockchain development isn’t worth it. But that it isn’t a cake to be tasted by everyone.
Some businesses are still finding it useful, and a few have been able to make an extremely good use of the technology. But in the end, if your brand or business really the three essentials of transparency, decentralization and security; only then you should, and must make use of Blockchain development from a top Blockchain development company today.
Top comments (1)
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