Slashdot Mirror
'You Do Not Need Blockchain: Eight Popular Use Cases And Why They Do Not Work' (smartdec.net)
Ivan Ivanitskiy: People are resorting to blockchain for all kinds of reasons these days. Ever since I started doing smart contract security audits in mid-2017, I've seen it all. A special category of cases is 'blockchain use' that seems logical and beneficial, but actually contains a problem that then spreads from one startup to another. I am going to give some examples of such problems and ineffective solutions so that you (developer/customer/investor) know what to do when somebody offers you to use blockchain this way.
1. Supply chain management
Let's say you ordered some goods, and a carrier guarantees to maintain certain transportation conditions, such as keeping your goods cold. A proposed solution is to install a sensor in a truck that will monitor fridge temperature and regularly transmit the data to the blockchain. This way, you can make sure that the promised conditions are met along the entire route.
The problem here is not blockchain, but rather sensor, related. Being part of the physical world, the sensor is easy to fool. For example, a malicious carrier might only cool down a small fridge inside the truck in which they put the sensor, while leaving the goods in the non-refrigerated section of the truck to save costs.
1. Supply chain management
Let's say you ordered some goods, and a carrier guarantees to maintain certain transportation conditions, such as keeping your goods cold. A proposed solution is to install a sensor in a truck that will monitor fridge temperature and regularly transmit the data to the blockchain. This way, you can make sure that the promised conditions are met along the entire route.
The problem here is not blockchain, but rather sensor, related. Being part of the physical world, the sensor is easy to fool. For example, a malicious carrier might only cool down a small fridge inside the truck in which they put the sensor, while leaving the goods in the non-refrigerated section of the truck to save costs.
Buzzword fail. Again. Make tech Great Again.
It's also a marketing problem vs a technical problem. Technically, you probably don't need blockchain. But for marketing purposes, would it make sense to use blockchain if that's what VC's are funding?
However, this quote from the article highly entertained me:
Oddly enough, even non-working cases may be useful. Say a corporation uses a long-outdated process/system. Instead of opting for a normal and obvious solution, management decides to invest in hype (blockchain/big data/AI/IoT) to gain a lead....If you are offered the chance to use blockchain, make sure it is actually blockchain. However, even if it is not, it could still be a sensible offer.
I am sure IBM right now is selling people "blockchain" technology that doesn't have any blockchain at all, just like they sell Watson technology without and Watson. It's a brand.
"First they came for the slanderers and i said nothing."
Deflating the football. Simply install a sensor on each official NFL football, and have the sensor transmit the pressure data wirelessly to the blockchain. When Tom Brady goes to deflate the ball, BINGO. It's game over for the cheating bastard.
If you approach a technology thinking, "This will solve all our problems!" then you are going to have a bad time.
You need to think critically about how that technology will help you. What distinct advantages does the new technology have over the old. And, most importantly, what new problems will this new technology introduce.
The majority of problems I see have nothing to do with technology, and everything to do with poor planning, poor process, etc.
Hadoop has been a fantastic example of this. Everyone and their goldfish think they need hadoop because they have SO MUCH DATA! Does your data measure in petabytes? No? Then you don't have as much data as you think you do.
And now we're seeing the same thing with blockchain.
As someone that got into BTC the month it was announced, it's nice to see articles like this lay bare the stupidity that is unfolding. Blockchain has extremely limited applications, and that's fine! It does great as a replacement for gold and timestamping. It really doesn't need to do anything else to offer the world tremendous value.
Half of it reads as if it was made up on the spot and hasn't had any research done to see if people really use it that way, and the other half reads as if it was meant to be part of a counter proposal PowerPoint.
Their examples feel particularly dubious. Someone might use microclimate in their shipping truck or copy a token to assure providence. While I can't say I've been swept up in the blockchain miracle workshop, I do know enough that neither of those things were ever meant to be solved or protected by what blockchains do.
It may be gauche to point it out, but I think Slashdot got bamboozled into putting an advertisement on the front page today.
IMHO, Bitcoin/cryptocurrency is just a Global Internet Scam!!!
&, IMHO, all the hype about Blockchain is a big part of the scam; to make the public think Bitcoin/cryptocurrency is the tech of future; an absolutely "sure thing" investment!!!
You think businesses need 'cloud' for everything? Or to rewrite their ERP systems every 5 years? The question is not whether blockchain is useful, the question is whether all the shiny suit wearing mono-rail salespersons can convince a business to give them money for their blockchain systems or consultancy work.
"Blockchain" was the buzzword last year with VC and Angel investors. At trade shows / conferences / etc where entrepreneurs were demoing products / services many investors could not help themselves, they had to ask about and ponder if "blockchain" could somehow be "incorporated" into the product / service in order to make it a more viable investment.
Using the word "blockchain" in 2018 was like using the word "internet" in 1999. It made every business venture "better". Lets see how 2019 goes.
That said, blockchain is useful, just like the internet. Useful as a public ledger, but not everything needs a public ledger.
As the author states, a lot of the supply chain stuff is garbage.
The only thing that might be useful is that if at any point where the product changes hands neither party trusts the other, a double-entry accounting of transactions can be useful. It can't prove what happened, but it can prevent a party from going back and changing what they had previously agreed happened.
I have 10 barrels of product I am handing over to a truck from a warehouse.
Let's say this is a traditional 'boring old database' and I agree that the truck took 10 barrels and the truck agrees it took 10 barrels and this goes into a database.
Now let's say that the trucking company controlled the database. They could decide to go back and change it to 'only 8 barrels was picked up', and then steal 2 barrels.
If the warehouse company controls the database, then they go back and change it to retroactively claim the truck picked up 12 barrels and accuse them of stealing 2 barrels.
Blockchain is *a* strategy where:
-Warehouse would authenticate a transaction where they provided 10 barrels
-Truck authenticates a transaction where they received 10 barrels
Any attempt by either party to 'rewind' and modify their transaction would leave them unable to produce a blockchain that has the other party agreeing to the new proposed way it went.
Of course a traditional database with signatures *could* be used as well, but in practice it just isn't done.
XML is like violence. If it doesn't solve the problem, use more.
The only usecase I've seen for blockchain that makes sense is the original usecase, a currency, and even then, only for some transactions, not for buying coffee at your local shop.
Blockchain conceivably is useful any time you might use a ledger or a chain of custody. I'm an accountant and there is active discussion among the accounting community if some version of blockchain might have utility over double entry bookkeeping in some circumstances. (spoiler: not sure yet but good chance) This isn't to say that blockchain is some magic bullet that will solve every problem and is useful in every case. But it seems likely that the technology will find some utility and the most interesting use cases are probably not as a currency.
Blockchain is only useful when you need a (very slow) public database and no one trusts anyone.
Correct and there are a non-trivial number of use cases like that. And your statement refutes your earlier argument. The slowness of the blockchain database along with cost is a big part of the reason why blockchain and currency don't make much sense for significant transaction volume. (There are other problems too but those are the biggies)
the summary could have listed the eight to see if the article was worth reading - the weird teaser is not even clickbait to keep reading.... how much you wanna bet all eight reasons are spread across eight pages rather than in a list on one page?
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Are you sure you are an accountant or do you just play one on Slashdot? Kidding aside, what you just said that makes no sense at face value. It's like saying blockchain might replace type declarations in C-programming or validation of an XML document. That makes no sense right? Doubleentry is just a layout strategy for keeping books and it's a formal declaration process where one record backs another record just like a C-header file is to the C-code block declaration.
SO you have my interest now. Assuming you are serious how does Block chain replace a format specification?
Some drink at the fountain of knowledge. Others just gargle.
I'm going to give you a list:
1) I said so
Politics; n. : A religion whereby man is god.
NIST has a good document on blockchain, see Section 8:
* Do you need a shared, consistent data store? If yes:
* Does more than one entity need to contribute data? If yes:
* Data records, once written, are never updated or deleted? If yes:
* Sensitive identifiers WILL NOT be written to the data store? If yes (i.e., public data only)
* Are the entities with write access having a hard time deciding who should be in control of the data store? If yes:
* Do you want a tamperproof log of all writes to the data store? If yes
* You may have a useful Blockhain use case
* https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf
That's a lot of "if yes" conditions to meet.
Blockchain is like Big Data - a buzzword that CEOs use to help set their sale price. Very few companies actually have a legitimate need for either, but many are doing it.
What, exactly, does "blockchain" have to offer with regards to "proof of authorship" that conventional PKI and digital notarization doesn't already address perfectly well?
Seriously. If you're trying to establish ownership of something in court, the only opinion that matters is the legal system's. If one side's case is based upon the word of a government-recognized notary, backed up by PKI provided by Verisign in compliance with the required ISO certifications... and the other side's case is based upon the word of some crowdsourced blockchain... the side with the notary and Verisign behind them is going to win, every single time. Even if blockchain ultimately gained equal recognition by the government, Verisign is still going to either outgun it... or own it as a subsidiary, rendering the distinction moot anyway.
GDPR and blockchain don't mix well (a bit like weapons grade uranium and plutonium) and none of the workarounds look completely sane. So if your problem contains ANY personal identifiers or personal data... RUN and don't STOP until you are sure the project is dead and firmly buried.
Not very well. You can buy miners for 80-500 dollars now, and bitcoin is hovering between 3000-4000usd on a 30 day average for this month.
I think the hype is starting to wear off. While bitcoin itself being cheap wouldn't, between the Chinese restrictions crushing their domestic market, and the drop in miner prices on amazon, I think the market is dead.
Without mining and massive amounts of electricity it's impossible to secure a public ledger based on blockchain.
Bitcoin is doing just fine. After three previous exponential runs up there was a 75% pull back and then a plateau for years. This exponential run had an 80-85% pullback but it is still at around 7x to 10x the previous multi-year plateau. It only looks bad for the speculators who bought during the exponential rise. People who bought on the previous plateau are doing quite well on the current plateau.
:-) Blockchain is like internal combustion engine technology, Bitcoin is like the Ford Model T car, the first popular large scale user of the technology.
At least so far, bitcoin will likely be replaced by some other coin someday. Blockchain based technology may be with us for a long time, but bitcoin is just a user of blockchain and completely replaceable. What we need here is a car analogy.
Deflation is very much not a good thing. That's why central banks pretty much make sure it doesn't happen. The rare cases where deflation has occurred are generally associated with economic depressions.
There are several problems with deflation, involving different aspects, but here's one of the simpler problems, one that is easy to explain:
You go to work today and earn $100.
Two weeks from now, when you get paid, it's only worth $90.
You have to trim your spending by $10.
EVERYONE ELSE had the same thing happen.
Everybody's paycheck is worth less, so everybody has to cut their spending.
Your boss tells you sales are down by 10% (of value), so he has to cut expenses. He cuts your hours by 10%.
That cuts your next paycheck by 10% due to fewer hours, ans another 10% due to more deflation.
You have to cut your spending by 20%.
Everybody else is in the same situation - everybody's paycheck is worth 20% less.
Everybody buys 20% less stuff, so your boss needs fewer workers ans cuts your hours by 20%.
Around around it goes, everybody's hours getting cut, paychecks getting smaller and smaller.
That's way economists want to see a few percent inflation - to guard against the wreckage that comes when you slip into deflation.
Yes, most use cases are stupid. I always point to DentaCoin as the ultimate in stupidify.
But, I think the following will be use-cases
- Decentralized finance
- Cash - Check out Grin for something that could actually replace credit-cards / debit-cards (if you think cash > electric payment options then I can't convince you of blockchain cash > other electronic payment)
- Sending money between countries - Wire transfers are expensive and _slow_
- Digital Assets - games, etc.
- micro-payments
- Open audit-able databases - useful in some industries in some cases, such as ownership or provenance
- Identity