In this article, I will talk about several alternative technologies that use the same principles as in the blockchain. They make it possible to achieve the same results as the champions of the blockchain praise, but at a much lower cost.
Checks
I've heard a lot of pitches associated with this or that "blockchain technology." Most of them are focused on a specific area in which there are problems with identifying those responsible for certain actions. As a rule, such pitches begin with posing a problem in this area, and then proceed to a story about how a blockchain could solve it. Often the problem is reduced to the unharmedness of the data. In other words, participants in a transaction or series of transactions have a disagreement about the reliability of the data, and this leads to a conflict. Usually one of the parties feels deceived, and the situation can become complicated before the trial and an expensive audit.
The authors of the pits promise that the blockchain will help to avoid such conflicts. An objective and unified database, to which participants could apply for confirmation of the data, would help them avoid a costly dispute. This is really an urgent problem, and a simple way to identify the perpetrator in a difficult situation would be very welcome.
However, it is not taken into account that blockchain in this context is only an expensive method of storing data that is subject to audit. Such data need not necessarily be decentralized. Moreover, storing the data to be audited in a blockchain is a rather bad idea, as this threatens their confidentiality. Those who are not related to the transaction (for example, competitors or journalists) get open access to its data in the blockchain. Thus, users sacrifice confidentiality for an expensive and slow, but easy-to-audit repository with high data redundancy.
This is an expensive and slow, but easy-to-audit repository that provides high data redundancy, but for this, you have to sacrifice confidentiality.
For such purposes, cryptography with a public key is much better suited. To store data in the form of multiple copies is too expensive and slow - instead, you can issue checks. Signing a check by all participants of the transaction, as well as its independent audit, is a much cheaper and faster way to verify the reliability of data compared to the mechanism of the blockchain, which, by and large, is intended for coordination of nodes.
Not without reason, checks have been used for several millennia. They provide written evidence of events that do not allow participants to make further changes. Thanks to public key cryptography and increased computing power, it becomes easier to verify the validity of data and perform real-time audits. The architecture, within which each participant keeps its own database of signed checks, is a cheaper and faster alternative to blockchain.
Central database with API
Depending on what definition of blockchain to use, you can consider such a system as an alternative. New records are entered in the database through the central participant of the system, and all the rest are free to reproduce this data.
Such a system can be considered as blockchain in the sense that information is stored in the form of ordered blockchain of data, but it is not decentralized. All the same, the single participant is responsible for confirming the data, and the transactions are signed by the contractors. This solution resembles any centralized service with an open API. The more extensive access to the data it provides, the more transparent and confidential this architecture is, and this is its main advantage.
This is not a new idea, and it is often used in online trading platforms. For example, eBay is based on approximately the same architecture, and it has been used for more than 20 years. Calling it a blockchain is like calling a horse a car because it moves on its own. Uber and AirBnB also serve as examples of e-commerce platforms with a similar architecture, in which new records are entered into the database by the central participant of the system.
A digital product that, in fact, improves the IT infrastructure in a specific industry, has the right to exist, although, in my opinion, there is nothing innovative in it.
On the other hand, the decentralization option is much more difficult. The data must be stored on a number of different nodes (in a decentralized state this is mandatory), and the synchronization noticeably slows down. It also requires an objective way to programmatically determine which records should be entered in the database, and each record must be made with the consent of the nodes. You can distribute the rights to write data between members of the network using proof-of-work, as Bitcoin does, but this approach is usually too slow and expensive for an infrastructure that processes a significant amount of data. For example, about 10,000 records per second are entered in the eBay database, and only 3 are in Bitcoin's lock. Other systems of this kind are susceptible to Sibyl attacks and coordinated attacks, or it is difficult to determine which version of the database is genuine.
In addition, the cost of development should somehow pay off, which often leads to the release of unnecessary tokens and financing of the "development tax" (the share of tokens reserved for developers). Thus, such platforms become too inconvenient and expensive for real application, as well as poorly scaled, not to mention the difficulties associated with making changes to the system.
Backup services
Another fairly popular application of the blockchain, which is confirmed by the company, is connected with the backup of data throughout the network. This can be useful in a regular disconnection of servers, but this is not enough to justify the use of such a slow and expensive system as a block system.
Tarsnap is a backup service that requires users to encrypt their data, excluding the possibility of access from the company. Tarsnap services cost $ 0.25 for 1 GB of traffic and $ 0.25 for storing 1 GB of data per month. In a widely used blockchain like Bitkoin, data storage will cost approximately 1 satosh for 1 byte, or 84 thousand dollars for 1 GB. Of course, Bitcoin is much more popular, but for the same money Tarsnip would keep your backups for 28 thousand years.
Many cloud providers offer even cheaper backup plans for all user data. Their services range from long-term storage on magnetic media to fast, emergency data recovery with a delay of only a few minutes. In the backup process, the most important thing is to provide a variety of storage systems to avoid a complete loss of copies. Blockchain does not provide such guarantees and does not allow duplicating data on different media in order to minimize the risk of failures.
Disaster recovery is a well-researched area, and it's not cost-effective to use a blockchain to create backups.
Venture capital and bootstrapping
The most successful use of blocking funds is to attract financing from a wide range of private investors through the ICO. However, ICO not only offers investors unfair conditions, but also are subject to serious manipulations in the form of preliminary mining, listing fees on stock exchanges and other unscrupulous methods.
Undoubtedly, companies that sell tokens are happy to make money on it, but the terms of such sales practically do not protect investors. And this harms not only investors who have no guarantee of getting goods or services, but also to companies choosing this method of attracting capital.
Insufficient financing often encourages companies to look for ways to improve profitability. However, instead, many companies get breathtaking amounts and lose all motivation to really solve existing problems, because they are getting away with everything. Often such companies turn into investment funds and transfer work on new technologies to outsourcing, financing other companies that develop products on their platform. Often these developers also attract capital through the ICO, which means they do not have any obligations to create a finished product. As a result, the market is flooded only by profit hunters, who do not need to create something new.
Such a lack of commitment leads to serious consequences. It is no coincidence that successful companies are almost never born from state programs of business stimulation. Money that is distributed without corresponding obligations, as a rule, is spent very unreasonably. Complaints usually begin only when all the money is already wasted. This leads to litigation and tougher laws to protect consumers' rights. For the company such an outcome is not at all the best.
An alternative is venture financing or bootstrapping. Venture financing usually imposes on the founders the responsibility for using the funds in accordance with certain restrictions. Bootstrapping is an even more reliable option, since the founders themselves finance the project, which means that they are interested in spending the money in a much more reasonable way.
Conclusion
To write checks, provide centralized services or create backup copies of data on a block of flats - it's like going shopping on a tank, compete on it in races or use it as an evacuator. For these purposes, there are more effective tools, and the block is too expensive, poorly scalable, and slow for most tasks.
Instead, companies should take advantage of those solutions that offer similar but really beneficial benefits to them, and stop selling their products using fashionable words. In the long run, such a deception will bring much more harm than good.
What about the detachment as a means of attracting investments - financing without obligations will inevitably lead to dissatisfaction with the community, and under such circumstances it is unlikely to create anything serious. Short-term wealth turns into long-term idleness. At first this state of affairs seems convenient, but later it turns out to be depressing. We can not rule out such harmful consequences as long legal proceedings, threats or imprisonment, in the event of the collapse of the token exchange rate.
There are well-known and well-studied alternatives to blockade. Instead of blindly giving preference to him, it is better to carefully analyze your needs and look for the optimal solution.
The excitement around the blockade is even worse than the excitement around the dotcoms. In the late 90's. companies changed their names to cash in on technological fever. Today, many companies do the same thing with the word "blockchain
".
Changing the label does not change technology, but only leads to an excess of supply, which is observed now.
Filter noise, understand the reasons for the rush and act reasonably.