Blockchain enters the picture
At the beginning of the year LinkedIn published the list of technologies that should become highly demanded in 2020. Blockchain took the lead, followed by cloud solutions and artificial intelligence. A few years ago this technology was associated solely with cryptocurrency, but nowadays it proves to be the object of interest for such major companies as IBM, Microsoft, and Amazon. What are the critics’ arguments and what to expect from blockchain in the near future?
Blockchain in 3 sentences
Blockchain is a distributed decentralized database that is represented by a chain of encrypted blocks containing information. Copies of that database are stored independently on a variety of computers. The blockchain architecture does not allow to modify the information that is already saved.
Strong points
Blockchain is considered a safe way to work with transactions of any kind. Each block is encrypted and added into the chain only after verifications, which allows to eliminate frauds. It is unnecessary to address external sources in order to check the authenticity of information.
Weak points
The consulting experts from McKinsey & Company find the absence of standard protocols and regulations a possible show stopper for blockchain scalability. Nevertheless, the introduction of standards seems to be a matter of time. Such major companies as Samsung, Facebook, and Amazon, whose impact on the global economy is tremendous, already use blockchain. These organizations might become the catalyst that will push the technology’s development. Progress is already achieved in several areas, though: international banks collaborated to develop an open-source business oriented blockchain platform called Corda.
Blockchain’s freshness limits its functional area. This is the current state of affairs, but the technology is developing, which results in eliminating technical constraints. Moreover, it is important to highlight the fact that in many spheres blockchain works in tandem with outdated methods of storing data. Complications and conditions that slow down the performance occur exactly where the old and new technologies meet. Another important point is that some companies do not feel confident enough about switching to blockchain, as their business requires time-tested complex solutions. Not everyone is ready to risk and equip their enterprise with a new technology.
Usage
It is possible to highlight two basic blockchain usage spheres.
Record keeping, static registry: a database for storing personal data, archives, real property titles, vote results, etc.
Transactions, static registry: a database that is updated with new payment records, digital assets exchange, etc.
Blockchain and big data
Experts stake on blockchain for a reason. The technology is promising, although its potential is not fully unlocked. One of the possible application scenarios is the integration with big data, the processing of both structured and unstructured data of huge volumes.
Such an integration is interesting in terms of taking advantage of the strong points of both technologies. Big data is all about information processing; blockchain is about validating data. The concept of big data provides a set of data processing methods, but the processing includes neither data authenticity checking nor data sources validation. Blockchain allows to track operations, which makes finding the data source possible.
Sceptics note that blockchain is far from full-scale operations with big data. The point is that such operations require reading huge amounts of information per second, but blockchain has a number of limitations caused by the core of the technology itself — distributed data storage. Decentralization allows users to work in the environments of credibility gaps; however, an extremely powerful system is required to ensure the proper performance.
The problem resides in the cost of the technology’s application, especially, in comparison with traditional and much cheaper ways of storing data. Blockchain attracts attention (the technology is the object of interest at the country level in China and Israel), so everything can change dramatically in the near future.
It seems that a new chapter in the history of blockchain is about to start. Major companies have already begun implementing the technology into their business processes, while experts keep finding new ways of applying blockchain. The interest on the national level is another good sign. If the technology officially enters the international market, standards and protocols will eventually appear. In such a new environment the hardware requirements will be optimized accordingly, this is a matter of time. The way of managing information by means of transparent systems that protect data from being tampered looks tempting, indeed.
