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'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.
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 Say a corporation uses a long-outdated process/system.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."
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.
"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.
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)
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
I actually liked the article, flaws and all. On the temperature and providence thing, I remember when Dallas Semiconductor first came out with the 1-Wire iButtons, proposing to solve some of these very issues. I still smile when I see them in these applications some 20 years later-- they work. They are the right type of solution to the first two problems-- sufficiently low cost to embed in things, and integrate encryption.
Physical vs virtual is a pretty good dividing line. Cash, even low value transactions, can be done effectively with Blockchain-- it just can't be universal.
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.
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.