Checklist: Does Your Project Need Blockchain?
By the end of 2018, everyone who was interested in technological innovations heard about blockchain revolution. The combination of decentralization, security and transparency formed the basis of the previously unattainable concept of information storage. Although blockchain is a database, its characteristics make it different and thus appealing.
If you are a startuper or a businessman and consider using blockchain in your project, you should take a look at the checklist given below. The chance that you don’t really need this technology is quite high. The desire to keep abreast of innovations and use blockchain revolution may cost you a lot. So, think twice before implementing it in your business processes. We will try to help you make the right decision.
Checklist: Do you really need blockchain?
1. You need a database
Using blockchain implies the need for a database. If a project doesn't need a structured data storage for some time, blockchain is not required at all.
2. Database must be accessible to multiple participants
Using blockchain makes sense if it's necessary to provide a number of participants with access to information. In this case the word “number” does not mean a lot of users. Their quantity can be different and depend on how big the company is.
3. Participants don't trust each other
- Each of them is independent and has direct access to data;
- None of them can make changes without a confirmation by other users.
Everybody knows how secure blockchain is, and so-called “trustlessness” is one of the reasons to use it.
4. Centralized database does not suit you
Do you need decentralization? It may be more convenient for you to store all information on a server or several computers without distributing it among ordinary participants. It largely depends on the hierarchical structure of data transfer and the scope of work.
- blockchain is necessary when it comes to organizing a personal data storage of residents of a state,
- but for storing personal information of employees in a company, a regular database is enough.
In the first case, the transparency and immutability of information that can be requested by any registry member is important.
In the second case, a management unit (a company) makes a database for accounting, not for employees to be able to see the information. However, immutability may also be important, which means that you can use a private blockchain.
5. You won't use intermediaries
This section is derived from the previous two. In a centralized database, participants are forced to trust the manager unit. The absence of intermediaries suggests that everyone has equal access to information: there is no central unit — there are no management units as intermediaries.
6. Safety and immutability are more important than speed and productivity
Blockchain doesn't consist of advantages only — it has drawbacks, too. Compared to regular databases, blockchain has the scalability problem and insufficient productivity.
These disadvantages are not noticeable if the amount of information is small. But it may become a real problem if you are going to store a large volume of constantly updated data.
7. Consensus is required to make changes
New information gets added to blockchain after it is validated by other participants. Validators are selected depending on the specific blockchain consensus. However, in any case, it is impossible to influence the verification by other participants (provided there are no gaps in security). Likewise, you cannot add new information to blockchain without approval, even if you really want to.
These were seven important points that determine the necessity of using blockchain. How many of them are you ready to tick? If you doubt that you need blockchain, it means you, most likely, don't need it. If you want to check yourself again, you can do it below.
Either way, remember: no matter how tempting the advantages of blockchain revolution are, there is a high chance you don't actually need them. The projects that position themselves as innovative due to blockchain implementation are not always like that. As a rule, they lose their reputation and loyalty very quickly. Don't forget it.