Blockchain is not all powerful
The article reflects the personal opinion of the author and is not an official position of Alfa-Bank.
Blockchain is not omnipotent: why the distributed registry technology cannot shake up the financial world, as cryptocurrencies do?
It is difficult, perhaps, to name a more HYIP theme in FINTECH than the blockchain. For the fourth year, witnesses of this technology talk about how it will change the world in general and the financial industry in particular. True, the promise of technology has not yet been confirmed by numbers. Last year, global investment in fintech exceeded $ 31 billion . Blockchain projects accounted for $ 512 million and 92 deals. Just for comparison, the insurance company (also insuretech) collected 4 times more for the money (2.1 billion dollars) and 2.5 times more for the number of transactions (247).
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I emphasize that this does not mean that blockchain is a bad technology or it has no prospects. On the contrary, there are industries where its implementations are waiting with great enthusiasm. Just yesterday, the news came that the American company Cognizant immediately united 14 Indian insurance companies in a project to create a blockchain platform for data exchange. Participants believe that such a platform will help avoid falsification of documents and false billing, and this, in turn, will save a lot of money and time. Changes will permeate the very business model of insurance, which is unlikely to make insurance cheaper, but more convenient - for sure.
However, in most cases everything is limited to pilots and agreements of intent. “Convenient” for blockchain transactions is now commercially launched by only one Santander bank, which makes international payments based on the Ripple platform. From the description of the project there is a feeling that they did it for the sake of a beautiful press release and in order to somehow explain the Santander investments in Ripple, made three years ago. Because from a user point of view, Santander One Pay FX service does not contain anything new. Quick translations existed before. Are the features of the blockchain not allowed to come up with something useful and tangible?
In fact, the reasons why the blockchain remains very beautiful, but not very practical technology, are quite commonplace. That's just overcoming them can be quite intricate process.
Large corporations love certificates. These pros relate to paper proofs of their competencies very differently, but in most cases there is an equal sign between the presence of a profile certificate from a recognized center of competence and admission to work.
In the blockchain world today, self-taught rule. They can be arbitrarily talented (and I believe that the majority are really cool), but from the point of view of the decision maker in the corporation, they are impostors. And they cannot be entrusted with a project affecting core-business. If we try to meet the mock-up phobias of corporate managers, we will quickly face the lack of generally accepted certificates. Searching by keywords leads us at best to lists, like this , where the IBM Blockchain Foundation course on Curcer and the hour and a half (!) Blockchain for Beginners video clip, which is offered to watch for $ 11, are intricately intertwined. Yes, of course, all such courses give certificates, but what can be done with them under the tough look of a corporate manager is not difficult to guess.
A separate item - security experts in the field of blockchain. They simply do not exist, because so far remains the mystery of the very vector of threats hidden in the new technology. Successful attacks on cryptoexchanges do not count, you need to accumulate a base of unauthorized infiltrations into public and private blockchains, as well as develop methods to counter them.
Until the IT giants of the level of Oracle and Microsoft start to certify blockchain specialists, it’s a little naive to wait for massive blockchain implementations in critical areas.
The fact that there are many different blockchains is not scary. At the initial stage of the formation of standards, this is always the case, and diversity does not interfere with implementation. Just choose the best option, and a bet on it. The problem with blockchains is that they are worse in speed than the seemingly “outdated” corporate databases. Public blockchains are lagging behind. Private - at times. There are areas where the speed of the transaction is not critical - the same insurance, logistics, notaries, etc. But in the classic mass financial transactions, the usefulness of implementing the blockchain is not obvious. And if a person in a suit also finds out that the cost price of a transaction in the blockchain is noticeably higher due to the cost of a larger amount of data (electricity, space on carriers, bandwidth of communication channels), it will be unrealistic to get his signature on the project.
Scaling a centralized database up or down is an elementary task. Cloud services and virtualization have turned the scaling of traditional platforms into something that does not require preparation. In the case of a blockchain solution, the physical increase in the number of servers or computing cores is not directly related to performance. Due to the peculiarities of the technology itself, the type of data in the blockchain influences the cost of resources, so it is not surprising if the addition of passports to the database suddenly puts a virtual machine. It is impossible to estimate the scale of influence “on the coast” That is, problems of project budgeting are added to purely technical difficulties. People in costumes do not like it.
Imagine that you want to implement a blockchain in your organization. With the motivation that it is modern, technologically advanced and allow to save on license fees for commercial databases. But when it comes to details, we find out that a) finding specialists is more difficult than Beatrix's tamers (although it would seem much more difficult?), B) the system will work at the same capacity slower and c) you can only estimate the cost of scaling process, but not at the start.
It is absolutely obvious that they will offer you to create a test zone, see how it goes, without haste to search for employees, and in a year or two ...
Actually, that's what happens. For 4 months of 2018, only one European bank invested in the blockchain platform (Credit Agricole and SETL transaction), but this is not a purchase of a solution, but a purchase of a stake along with S2iEM, Deloitte and Citi. The rest of the banks prefer to invest in optimizing work with stocks, bonds and other securities.
Let's not deny that cryptocurrency shook and in many ways changed the financial world. But the blockchain, which became the foundation of crypto-revolution, could not shake up the classical financial institutions. To do this, he will have to learn to walk in a suit, protect budgets and monitor KPIs.
Well, or to offer the mass consumer something that makes a classic an anachronism. Although not too much, we expect from just a more secure database?
Blockchain is not omnipotent: why the distributed registry technology cannot shake up the financial world, as cryptocurrencies do?
It is difficult, perhaps, to name a more HYIP theme in FINTECH than the blockchain. For the fourth year, witnesses of this technology talk about how it will change the world in general and the financial industry in particular. True, the promise of technology has not yet been confirmed by numbers. Last year, global investment in fintech exceeded $ 31 billion . Blockchain projects accounted for $ 512 million and 92 deals. Just for comparison, the insurance company (also insuretech) collected 4 times more for the money (2.1 billion dollars) and 2.5 times more for the number of transactions (247).
')
I emphasize that this does not mean that blockchain is a bad technology or it has no prospects. On the contrary, there are industries where its implementations are waiting with great enthusiasm. Just yesterday, the news came that the American company Cognizant immediately united 14 Indian insurance companies in a project to create a blockchain platform for data exchange. Participants believe that such a platform will help avoid falsification of documents and false billing, and this, in turn, will save a lot of money and time. Changes will permeate the very business model of insurance, which is unlikely to make insurance cheaper, but more convenient - for sure.
However, in most cases everything is limited to pilots and agreements of intent. “Convenient” for blockchain transactions is now commercially launched by only one Santander bank, which makes international payments based on the Ripple platform. From the description of the project there is a feeling that they did it for the sake of a beautiful press release and in order to somehow explain the Santander investments in Ripple, made three years ago. Because from a user point of view, Santander One Pay FX service does not contain anything new. Quick translations existed before. Are the features of the blockchain not allowed to come up with something useful and tangible?
In fact, the reasons why the blockchain remains very beautiful, but not very practical technology, are quite commonplace. That's just overcoming them can be quite intricate process.
Mustaches, paws, tail - these are my certificates!
Large corporations love certificates. These pros relate to paper proofs of their competencies very differently, but in most cases there is an equal sign between the presence of a profile certificate from a recognized center of competence and admission to work.
In the blockchain world today, self-taught rule. They can be arbitrarily talented (and I believe that the majority are really cool), but from the point of view of the decision maker in the corporation, they are impostors. And they cannot be entrusted with a project affecting core-business. If we try to meet the mock-up phobias of corporate managers, we will quickly face the lack of generally accepted certificates. Searching by keywords leads us at best to lists, like this , where the IBM Blockchain Foundation course on Curcer and the hour and a half (!) Blockchain for Beginners video clip, which is offered to watch for $ 11, are intricately intertwined. Yes, of course, all such courses give certificates, but what can be done with them under the tough look of a corporate manager is not difficult to guess.
A separate item - security experts in the field of blockchain. They simply do not exist, because so far remains the mystery of the very vector of threats hidden in the new technology. Successful attacks on cryptoexchanges do not count, you need to accumulate a base of unauthorized infiltrations into public and private blockchains, as well as develop methods to counter them.
Until the IT giants of the level of Oracle and Microsoft start to certify blockchain specialists, it’s a little naive to wait for massive blockchain implementations in critical areas.
Slow Standards Zoo
The fact that there are many different blockchains is not scary. At the initial stage of the formation of standards, this is always the case, and diversity does not interfere with implementation. Just choose the best option, and a bet on it. The problem with blockchains is that they are worse in speed than the seemingly “outdated” corporate databases. Public blockchains are lagging behind. Private - at times. There are areas where the speed of the transaction is not critical - the same insurance, logistics, notaries, etc. But in the classic mass financial transactions, the usefulness of implementing the blockchain is not obvious. And if a person in a suit also finds out that the cost price of a transaction in the blockchain is noticeably higher due to the cost of a larger amount of data (electricity, space on carriers, bandwidth of communication channels), it will be unrealistic to get his signature on the project.
Scalability as a challenge
Scaling a centralized database up or down is an elementary task. Cloud services and virtualization have turned the scaling of traditional platforms into something that does not require preparation. In the case of a blockchain solution, the physical increase in the number of servers or computing cores is not directly related to performance. Due to the peculiarities of the technology itself, the type of data in the blockchain influences the cost of resources, so it is not surprising if the addition of passports to the database suddenly puts a virtual machine. It is impossible to estimate the scale of influence “on the coast” That is, problems of project budgeting are added to purely technical difficulties. People in costumes do not like it.
Snowball uncertainty
Imagine that you want to implement a blockchain in your organization. With the motivation that it is modern, technologically advanced and allow to save on license fees for commercial databases. But when it comes to details, we find out that a) finding specialists is more difficult than Beatrix's tamers (although it would seem much more difficult?), B) the system will work at the same capacity slower and c) you can only estimate the cost of scaling process, but not at the start.
It is absolutely obvious that they will offer you to create a test zone, see how it goes, without haste to search for employees, and in a year or two ...
Actually, that's what happens. For 4 months of 2018, only one European bank invested in the blockchain platform (Credit Agricole and SETL transaction), but this is not a purchase of a solution, but a purchase of a stake along with S2iEM, Deloitte and Citi. The rest of the banks prefer to invest in optimizing work with stocks, bonds and other securities.
Let's not deny that cryptocurrency shook and in many ways changed the financial world. But the blockchain, which became the foundation of crypto-revolution, could not shake up the classical financial institutions. To do this, he will have to learn to walk in a suit, protect budgets and monitor KPIs.
Well, or to offer the mass consumer something that makes a classic an anachronism. Although not too much, we expect from just a more secure database?
Source: https://habr.com/ru/post/353818/
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