Blockchain: Is the Technology Ripe or Just a Hype?

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    Blockchain’s accolades are unmistakable: Whether it’s logistics, finance, public administration, human resources, healthcare, environmental protection or even global poverty reduction, Blockchain technology is set to revolutionize things. Also, the hassle with hacked data should be terminated.

    Blockchain will be a similar data revolution as the Internet did a few years ago. The new system replaces many of the transactions that are currently still running on conventional databases.

    Blockchain: decentralized and secure

    In the broadest sense, Blockchain is a database. But there are a few significant differences. So, there are specific rules on how the data is written to the database. That is, there must be no conflict with other data already in the database (consistency), only data can be added (immutability) and the data itself is tied to an owner (name).

    The database is replicable, and everyone can access it equally. Finally, there is a consensus among the participants in a blockchain about the current status of all stored information, and there is no central monitoring. Especially the last point makes the big difference to all existing IT applications. Banks are no longer in the financial world, notaries, trustee or clearing houses in administration and commerce.

    Experiments and projects

    What that means in practice can be illustrated by a few examples. That’s how IBM and container carrier Maersk are working together to implement IBM’s blockchain solution for international freight traffic. The goal is to reduce the current paper costs and speed up the processing.

    It is also the work of the English HSBC Bank. According to their statements, Blockchain is now suitable for the financial security of international trade. The bank has recently secured a guarantee for a shipment of soybeans from Argentina to Malaysia with Blockchain.

    In Berlin, the Startup Brickblock tries to establish a Blockchain for the real estate market. The transactions are much faster. Besides, you can resell only a part of the real estate. In the US, Bitwage operates a blockchain-based pay system for micropayments for com-economy programmers. These are mostly located in countries where it is difficult to get a bank account, and international transactions are associated with high fees.

    Bitcoin

    Blockchain’s technical issues are modest compared to the cultural and emotional barriers. There are also some bad images surrounding Bitcoin transaction.

    For example, with Brickblock you have to buy a cryptocurrency first with real money. With this then the real estate purchase is paid. As long as you stay in this cryptocurrency, that’s no problem. But when you switch back to euros or dollars, there can be a rude awakening.

    Bitcoin or Ethereum may fluctuate more than 30 percent on some days. No wonder that established investors do not care about the cryptocurrency.

    Disruptive technology

    Also, there are also technological problems. The decentralized structure of data storage and processing makes the system slow, requires significantly more storage and energy.

    The blockchain is a fundamentally disruptive technology; it’s not something you can switch on quickly. Customizing and changing Blockchain requires a lot of time and planning. Some things need to be considered and considered beforehand, such as scalability, security, and cost.

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