Over last few years I have seen Blockchain technology climb the hype curve and the hype refuses to die down. I've spent countless hours reading about the technology and the potential use cases it can solve. The basic arguments for Blockchain are about Decentralization, Immutability, Traceability and no need of intermediaries for transacting.
The use cases I hear about are A blockchain of Financial Assets (think of Land Records, Currency, etc.) or a blockchain of records which record the movement through the supply chain etc.
Now one the fundamental usecase from which blockchain is refactored out is that of bitcoin. As far as I understand blockchain is a distributed ledger with 2 features which make it unique.
- It's a consensus based ledger without a central authority. As in if more then 50% of the nodes believe a transaction has happened then it's considered as consensus.
- It's an immutable record of transactions, i.e. once the 50+% of people have recorded and validated the transaction. It can't be tampered with anymore. It can only be reverted by doing a compensatory transaction.
Apart from these there are other features like open for all, anyone can participate etc. which are also found in run of the mill technologies.
Blockchain made a lot of sense with bitcoin because,
- The bitcoin was a digital asset, which took birth in bitcoin's blockchain and remained in the same ledger from birth.
- There is no physical asset changing hand and hence the transactions are really tamper proof.
Now any usecase which people try to solve with blockchain have a few contradictions to the original usage of blockchain.
- In most use cases, a central authority (A government or a company) wants to "Own" the blockchain.
- In most use cases, the underlying asset is not digital, e.g. food through a supply chain, or land. In such cases, blockchain can't offer any protection as the physical good can easily be tampered with.
