Blockchain Under Fire

Since the ICO tsunami in 2017, blockchain has been a buzzword. Recently it has increasingly been a subject of intense criticism, much of which is legitimate. But a reality check reveals an interesting perspective that has been universally ignored.

Image Credit: marketoonist.com

Blockchain Tech Readiness Levels (TRLs)

Blockchain Technology Timeline
The BANKEX blockchain pilot project WaterCoin estimated to reach TRL 7 in 2020. Reference: Arup Blockchain Technology Timeline

43 Blockchain Projects With Zero% Success Rate

Image Credit

The dApps Craze & The Frivolous Use-Cases

In the vast sea of countless legacy applications, genuine use-cases for blockchain are few and far between. Contrary to popular belief, blockchains are not a good solution for storing data. Each piece of information that one stores in the blockchain sits in hundreds or thousands of nodes making it an extremely costly solution. When it is clear that most use cases that blockchain is being pushed for do not at all benefit from the expensive decentralization or immutability of proliferated database, is there any justification for a multitude of dApps?

Zero Transaction Volume

Source: https://www.stateofthedapps.com/stats

The OS Fad

Every other blockchain out there claims to provide an operating system (OS) for the decentralized applications (dApps) of the future. As we have seen in the previous section, if there is no place for a slew of useless dApps, the need for a blockchain OS at best is futile if not absurd. It’s like having an operating system with no meaningful Apps to operate.

Is Blockchain A Lost Cause?

A vast plethora of scholarly articles hail blockchain as a powerful technology. It may indeed be. But, so is nuclear tech. Do you use nuclear energy to heat up your morning cup of coffee? Do you use a cannon to knock down a fly?

Applying the transaction speeds and cost of ethereum to all and sundry legacy applications that are being converted to dApps, the technology may indeed look crappy and useless.

In fact Ethereum should have no role in dApps of tomorrow, if at all any justifiable use cases are uncovered in future. But Ethereum does neither define the entire scope of the blockchain technology, nor it was designed to do anything more complex than ERC20 tokens, which it undoubtedly did exceedingly well. Ethereum sure is a revolutionary milestone in the history of blockchain. But, the critics have to realize two things:

Source: AlgoShare
  1. Whether decentralization adds additional value over conventional low cost relational database,
  2. Whether value of each transaction (new data entry) is more than the cost of recording it on the blockchain, and,
  3. Whether there is incentive for peers to participate in the network.

Suitability Of Blockchain

It’s already established that a blockchain is very expensive relative to centralized databases. So the primary reasons one would use it is for immutability and removing the single point of failure or control, provided the use-case justifies the high cost. Besides, there may be completely new use-cases that were unknown to prior art before the advent of blockchain. In other words, those use cases that can be enabled only on blockchain network and would be impossible otherwise, are the most suitable for blockchain deployment.

  1. Influence-Based Crowdfunding 4.0: ZeroCash
  2. Ideal Money
  3. Tokenization Of Highly Illiquid But Inflationary Assets
  4. Taming The AI (Artificial Intelligence)
  5. Incentivized Censor-Resistant Content Sharing
  6. Decentralized Exchange (DEX)
  7. ID Authentication (for high value secure transactions)
  8. Asset-Backed Tokenized Loyalty Programs
  9. High Value Asset Tracking
  10. Autonomous Mobility & Collective Artificial Super Intelligence (CASI)
  11. High Value IoT Device Security

Conclusion

So, will blockchain really change everything? Conservatively speaking, may be not.

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