https://www.ibm.com/blogs/insights-on-business/government/ten-things-blockchain-not/
May 2, 2017 | Written by:
John Palfreyman
Categorized:
Industry Insights
Over the past months, I’ve written much about
how blockchain – as a trusted, distributed ledger with shared business
processes – can provide transformational value to almost all industries.
One of my colleagues recently suggested I should also say
what blockchain is not.
Since I try hard not to practice blockchain religion (“blockchain is
the answer, what’s the question”) I jumped at the chance . . .
So here are my ten things blockchain is not:
[1] Blockchain is not Bitcoin: bitcoin is an
unregulated, shadow currency – often termed a “cryptocurrency”. Whilst
Bitcoin was the first blockchain application, it has fundamental
differences from a business blockchain. For example, a business
blockchain usually prioritizes identity over anonymity and uses
selective endorsement of transactions in place of
computationally-intensive proof of work.
[2] Blockchain is not (yet) mature: Gartner stated
in their 2016 report that blockchain is at the peak of inflated
expectations on their hype cycle. They say it’s some 5 to 10 years from
the plateau of productivity, which I regard as conservative for some
use cases. Problem is, with all the hype, it’s easier to think
blockchain for business is more mature than it is. A sense of reality
must be maintained, especially when seeking out the use case for a
blockchain first project.
[3] Blockchain is not a product: we refer to
blockchain as a fabric (like middleware, or plumbing) that can be used
to build an exciting array of business solutions. Blockchain’s utility
comes from an appropriate set of applications built on top of it.
[4] Blockchain is not needed when there is no business network:
the existence of a business network is the mandatory test for a
blockchain use case. Quite simply, with no business network means
blockchain is an overkill, and probably a distributed database would be a
more appropriate (and more mature) solution.
[5] Blockchain is not a transaction processing system replacement:
blockchain can transform transactional processing across a business
network for sure, but ONLY when one or more additional criteria are met –
specifically:
If none of these criteria are important, or our customers are happy
with the levels provided by their current solution, then a blockchain
replacement is not needed.
[6] Blockchain is not a distributed database replacement:
blockchain complements distributed database technology, with
appropriate information partitioning between the two. And as cited in
[4] above, a distributed database is likely a better solution where a
business network is not involved.
[7] Blockchain is not a secure messaging replacement:
there are many excellent secure messaging solutions which are
invaluable in integrating together disparate business systems.
Blockchain technology is complementary – indeed has much to learn far
from secure messaging systems – and is certainly not a replacement for
them!
[8] Blockchain is not just about currency: whilst
blockchain is an excellent choice for a regulated digital currency, it
can be used keep a trusted audit train of ownership of a vast range of
asset types – both tangible (house, car, diamond, antique violin) and
intangible (digital music, digitized video, financial instrument,
document, digital goods) assets. This makes for a highly diverse choice
of blockchain use cases.
[9] Blockchain is not usually suited for high volume, low value transactions:
as blockchain for business matures, fabric developers will turn to
non-functional requirements including transaction throughput. In the
near term, the technology remains better suited to low volume high value
transactions, because of the additional qualities of service that a
distributed processing system provides.
[10] Blockchain is not (necessarily) anonymous:
depending on the choice of fabric, blockchain can support anonymous
transactions across an “untrusted” network. However, blockchain for
business prioritizes identity and trust over anonymity.
#ibmaot
