The future for blockchain looks promising, but we need to have a clear understanding of what this technology can do differently or better than any of the existing ones. Otherwise, its value will be driven by a conflation of misguided notions. 75% of companies seek to buy a business case rather than selling a solution. However, when we look at blockchain in next 20 years, the impact may be as profound as that of the internet. As a technology for decentralized business ecosystems, there are several, yet specific, use cases that rest on the unique strengths of blockchain.
Blockchains have paved a new way to handle digital transactions securely with anyone, anywhere. It has a crucial feature of enabling decentralization; however, many of its projects stem out of centralized designs and hamper its complete potential. For exploring what makes blockchain ‘disruptive,’ it is necessary to turn the hysteria around it into effective and real-world applications. Unrealistic expectation setting can become detrimental to its mass adoption.
Let’s go over some of these common expectations, to understand why they might be unreal.
#Myth 1. It is Highly Scalable
Blockchain is not as scalable as its counterparts in transaction processing. It is scalable for small payloads and till a certain limit. Information can’t just be piled on the distributed ledger.
#Myth 2: It’s incredibly secure or tamper-proof
Although based on cryptographic standards, blockchain cannot be responsible for privacy that lies beyond the scope of its standards and implementation. The use cases where its application can help actualize safety and privacy are best understood by cryptographic experts.
#Myth 3: It’s trustworthy
Blockchain has to ensure data and transaction integrity; else nothing remains trustworthy about any information that gets stored on it. This layer of trust can be established by verifying the parties who store data on blockchain and validating information among them. So, a governance model that allows collective responsibility within several parties is a prerequisite for the technology’s efficient operations.
#Myth 4: Anything can be put on blockchain
Blockchain might not have standard rules or guidance to be followed across all projects, but it has specific protocols defined with coding. So, a standard should be agreed upon among all participants. This allows for interoperability between products that are not yet real.
#Myth 5: Anything can be expressed in a smart contract
Often, blockchain application is restricted to well-understood and straightforward use cases. However, with smart contracts once published, no revisions can be made to fix them. This involves complex interactions and severe consequences. The DAO cost participants tens of million dollars in just a few hours, as its resolution nearly broke the community. It’s essential to find the right cases, instead of assuming that they are all going to be successful.
#Myth 6: If you don’t like a public blockchain, go private
Private blockchains are not the solution to privacy or restricted access to information. In fact, private blockchains should not be counted as an option. Enterprise blockchains may fail to realize the benefits of real decentralization. Privately developed blockchains may lack the community and academic scrutiny necessary to ensure the technology’s best use.
Large communities comprising of adopters, academicians, and implementers have forked blockchain products to enhance them in various ways. It’s believed that gradually, only open source blockchains with large communities will continue to survive, while the rest will die an unglorified death. Thus, most potential blockchain applications will be requiring industry-driven standards within their reach. Many require stronger validation of facts represented on them.
In conclusion, several blockchain techniques have already been commoditized. With the aid of cloud implementations, blockchain nodes are allowed on every popular code base. Blockchain is not a differentiator by default, as differentiation arrives from the use case. The best thing that can be done is to tackle real business problems creatively. Proofs-of-concept can also be launched for a better understanding of the power of blockchain.