When blockchain is useless
I am a big fan of cryptocurrencies and blockchain and I think that this technology will define the future of mankind. But even I think that blockchain is not always useful.
So today I wish to talk about the spheres where blockchain is as good as a fifth leg for a dog.
The first sphere, where the application of blockchain raises doubts, is trade. On the one hand, blockchain in trade allows to supervise goods delivery, check expiry dates, create loyalty programs for customers and businesses.
But on the other hand, this industry can do without it.
Introducing the blockchain technology into these processes, especially at initial stages, can create an effect opposite to what you hoped for. Instead of optimizing the processes, it will unleash true chaos. Firstly, to make a new system work, a lot of time is required, during which your business will incur losses. Secondly, it is far from obvious that a new system will justify your expectations and be convenient for your partners and clients.
Food manufacture and agriculture
The idea of using blockchain in farming is very appealing to me — all these Bananacoins, ITcoins and Baconcoins put a smile on my face, it’s like looking at small kittens.
But frankly speaking, blockchain for these projects is a successful marketing move at best, at worst — a fifth leg which is simply useless.
Real estate deals
Blockchain in the service sphere is, in my opinion, a rather dubious idea. Last year, at the peak of the “cryptocurrency euphoria”, there appeared tens of projects offering different approaches to the use of blockchain in real estate transactions, whose ICOs paid off handsomely. They justified the use of blockchain by claiming that it would allow to reduce document circulation, get rid of intermediaries and their commissions and conduct transactions directly between the buyer and seller. It would also simplify the contractor verification procedure and protect from swindle.
All this is remarkable, but introducing blockchain in real estate transactions is at the moment restricted by the cryptocurrency legislation. Whether it makes much sense for a real estate agency to use blockchain now is open to question.
Another very interesting way of applying blockchain is the creation of cloud services. Developments in this sphere have been conducted since 2016. The first projects that launched their ICOs with this idea claimed that storing data on cloud services was not safe, as the user depended too strongly on one centralised service that stored his data.
And here, two years later, Google announced the introduction of blockchain in its cloud service. It is not that I consider this idea ridiculous, more like I am is not assured of the need in such projects. After all, the existing cloud services are quite good at solving this problem, besides they are constantly improved.
I have found some good medical projects on blockchain, but on the whole there is no big need to apply this technology here. Blockchain is suggested to be used for storing patients’ data, medical insurance or, for example, creating donor systems. But blockchain itself plays a minor role in all these projects.
To sum up, blockchain can be useful for b2b, but I can hardly imagine that it could be useful, for example, in a supermarket. It is also quite strange to use blockchain in company document circulation or data analysis.
Just like any other technology, blockchain has its limits. It is not necessary to introduce it where one can live without it.
P.S.. After reading all this you may want to ask what spheres I consider most suitable for blockchain. My answer is gaming and gambling. Read more in the upcoming posts on my blog.