Oct 24, 2018

Was Blockchain Built for the Long Haul?

Was Blockchain Built for the Long Haul?

Often likened to emergence of the internet, the revolutionary entrance of Blockchain into mainstream vernacular has people racing to get involved. Innovators, technologists, and entrepreneurs are all investing in Blockchain in hopes of capitalizing on what seems to them as a tremendous opportunity. As the Blockchain boom continues, skeptics are wondering how this breakthrough technology will fare under widespread adoption. Will it withstand the use of over one billion users, or will it buckle under pressure?

Blockchain is a decentralized, un-hackable ledger that is programmed to record anything of value. Comprised of “blocks” of data that build off one another, the data chain is constantly updated with new information across a network of computers. Blockchain’s data base is shared across a public network accessible to anybody, meaning Blockchain cannot be controlled by one single entity.

Blockchain relies on the assistance of a network of contributors that are constantly imputing data in order to allow exchanges to take place. Because the data stored is spread across a network, Blockchain doesn’t face the same threat to corruption and hacking that centralized databases deal with.

What is unique about Blockchain is the broad scale of its’ applications. While many associate Blockchain with the famous cryptocurrency, Bitcoin, there are many more arenas where Blockchain has a significant purpose. Blockchain can be used to exchange anything of value, including currency, data, or even something tangible such as a household item. Many industries are now embracing Blockchain to assist them in recording supply chain and data collection.

Despite the initial burst of enthusiasm in Blockchain, there are some obstacles to the widespread adoption of this technology that are cause for concern. As with anything that grows exponentially at a rapid rate, there is a danger of sudden demise. Due to the structure of Blockchain, each data block in the chain builds atop the previous one. This means that every additional block adds to the ladder of transactions. The more blocks that are added to the chain, the higher the risk of collapse.

Time must also be considered when talking about the scalability of Blockchain. Each transaction in the chain relies on peer-to-peer data input, making it extremely time-consuming. As the user volume begins to grow, more time is needed for verification, and longer waiting times for transaction processing will incur. In addition to wait times, prices will also increase as volume in parallel to the number of users as more nodes will be needed to processing, and each node costs money.

Ambiguous understanding of the virtue of Blockchain by the public may also be a pitfall. Due to its’ broad application, there is not one centralized “Blockchain” but rather many different subsets and usages. The different competing technologies make it difficult for users to identify with one specific usage. Complicated procedures required to establish a wallet deter users from taking the leap into this new terrain.

As with anything, drastic changes take time. Blockchain, once considered a fad, is still struggling to gain acceptance amongst skeptics who are convinced that eventually it will end in collapse. Supporters of Blockchain, on the other hand feel that the influence of Blockchain is comparable to that of the internet, which also took time to become widely accepted. One thing is for certain, Blockchain must be prepared to manage the scale and volume of its’ users as more and more people are turning to this technology.

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