Tuesday, January 2, 2018

Avoiding the Pointless Blockchain Project

A big thank you to a reader who pointed me to this very interesting and informative article on the blockchain concept. Most people like myself hear this term used all the time now and wonder what it really is and why people are interested in the technology. 

This article provides one of the best detailed explanations I have seen. Interestingly, it comes from a blockchain developer who points out that in many cases a blockchain is not really needed at all and anyone looking at using the technology needs to fully understand why they might use it. Below are some excerpts from the article.


"Blockchains are overhyped. There, I said it. From Sibos to Money20/20 to cover stories of The Economist and Euromoney, everyone seems to be climbing aboard the blockchain wagon. And no doubt like others in the space, we’re seeing a rapidly increasing number of companies building proofs of concept on our platform and/or asking for our help.
As a young startup, you’d think we’d be over the moon. Surely now is the time to raise a ton of money and build that high performance next generation blockchain platform we’ve already designed. What on earth are we waiting for?
I’ll tell you what. We’re waiting to gain a clearer understanding of where blockchains genuinely add value in enterprise IT. You see, a large proportion of these incoming projects have nothing to do with blockchains at all. Here’s how it plays out. Big company hears that blockchains are the next big thing. Big company finds some people internally who are interested in the subject. Big company gives them a budget and tells them to go do something blockchainy. Soon enough they come knocking on our door, waving dollar bills, asking us to help them think up a use case. Say what now?
As for those who do have a project in mind, what’s the problem? In many cases, the project can be implemented perfectly well using a regular relational database. You know, big iron behemoths like Oracle and SQL Server, or for the more open-minded, MySQL and Postgres. So let me start by setting things straight:
If your requirements are fulfilled by today’s relational databases, you’d be insane to use a blockchain."

My added comments: This article goes on to explain how blockchain works in great detail and of course why there are some good reasons why some people might want to use it. One key is to understand that all blockchain is not the same. While some versions are slow and costly (by design), others might actually save time or money in processing transactions. It's certainly understandable that any bank or business might look into anything that can reduce costs or speed up transaction processing or both.
I felt like I learned a lot from this article and wanted to share it with readers here looking for a more detailed understanding of this somewhat complex topic.

Added news note 1-3-2018: The Stellar Lumens we mentioned in our previous blog article here hit a price of .87 per Lumen this morning (see current price here). This is .50 per Lumen higher than when we wrote our article based on the closing price on 12-31-17 (just three days ago). That is an incredible 350 times the price on 1-1-2017 we cited in our previous article.  Also, Does CNBC read this blog :-)

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