Blockchain When should it be applied?

This picture describes the cases of blockchain technology on real projects. We will tell in this article about other uses, without mentioning cryptocurrency , as well as the pros and cons of using the blockchain.

Before we look for an application, the blockchain needs to understand what it is and what competitive advantage it gives compared to other technologies.
Blockchain is a way to organize data storage by writing to the event log. Plus, there is one usp in the blockchain - this is the impossibility of replacing journal entries by recalculating the checksum of the entire journal with cryptographic algorithms, starting with the very first entry.
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At its core, the blockchain is similar to the CQRS pattern, which is based on event sourcing . If to simplify as much as possible, both there and there is only support of inserts, if to speak in terms of databases. Update and delete are not supported for entities. And if in systems built according to CQRS no one bothers to delete or update an event from the log, then it is impossible in the blockchain because of the integrity of the whole log.

This implies the first and main requirement for systems in which the blockchain is to be used - a priori, the system’s distrust of users to each other. That is, by default, each participant is considered a liar who can compromise data. In fact, the blockchain is a way to protect against fraud in information systems. There would be no “scammers” in our world, there would be no need for a blockchain.

A key feature of the blockchain technology, which distinguishes it from traditional database technology, is public access testing, which is provided with integrity and transparency.

Integrity — Each user can be sure that the data they receive are intact and unchanged since they were last recorded.
Transparency - each user can check how the blockchain has been updated over time.

The advantages of a distributed transaction logging system go beyond the financial services sector, which is the main “customer” of the blockchain. In the public sector, a secure distributed registry can provide greater openness and transparency, as well as transform such services and processes
like licensing, personal identification, voting, profit management and more. Industries such as retail and manufacturing can also benefit from better supply chain management, smart contracts, without fear of distorting the information.

Another use for the blockchain is healthcare. In health care, the transaction log eliminates all the cumbersome, costly third-party verifiers by directly linking patient records to clinics and financially interested parties. Information stored in a blockchain can be used to provide fast, reliable, authenticated access to personal medical records for healthcare organizations.

We now turn to the minuses of this technology.

1. In order to ensure the notorious transparency of the blockchain, it is necessary that all data be public. This means that it is not possible to hide part of the data from users who should not have access to it. Although there are already projects that allow you to circumvent this limitation. For example, Hyperledger .
2. For me, it still remains a question who will “mine”, that is, collect transactions into chain blocks. If in the cryptocurrencies for this process miners are taken for a reward, then who will do it in corporate blockchains? If only a centralized server, but again there is a risk of data being compromised.
3. Also not unimportant factor when choosing a blockchain is the system performance and the amount of memory occupied by the transaction log. If performance comes first, and the number of transactions is expected to be decent, then you should think twice about choosing a blockchain.
4. And as without everyone's favorite GDPR . Then there is the problem of getting user data in the blockchain. Once in the journal, it’s no longer possible to remove them from there. “What is written with a pen cannot be cut down with an ax.”

What I would like to say in conclusion, always carefully weigh the technical decisions that you will make on projects.

References:

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The author is Mikhail Shishlo, Head of Development