Blockchain and BIT: no miracle cure

Blockchain and BIT: no miracle cure

After having been for long a little-known technology, the Blockchain has recently started being on everybody’s lips ( more or less ), supposedly the perfect solution to apply in every field. The most common statement nowadays is that, differently from Crypto-currency which has turned out to be just a temporary fade, its founding technology is revolutionary.

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True or false? According to a survey conducted by Ender Analysis “Blockchain: Reinventing the wheel”, the answer is “maybe”. Since it is actually a useful technology, but definitely not a miracle cure for all systems and problems including the “issue of the Irish border brought about by the Brexit”, as someone said.

The first thing to point out is that we need to distinguish between the Blockchain per se, the one connected to the bitcoin, and the blockchain-inspired technology (BIT), i.e. all technologies inspired by the blockchain but with no link whatsoever with the crypto-currency. The BIT operates in different ways and aims at achieving results comparable to those of the real blockchain while, at the same time, giving up its most “uncomfortable” features. However, according to Ender Analysis, the technology is not revolutionary at all, while the real Blockchain is innovative from several points of view. First of all the decentralization and the control of the blocks (if you don’t know what I am talking about, please read The Blockchain, the “next big” thing which is meant to revolutionize marketing). Nevertheless, having been conceived as a payment service, it is not so easy to apply to many other fields, since it requires the use of a crypto-currency, and people rarely need its level of decentralization or consistency.

The incorruptibility of data and the resistance to tampering may even be counterproductive. Let’s take the GDPR as an example: it offers citizens a “ right to oblivion” according to which companies holding data for processing are expected to cancel them. However, this is quite difficult if they are recorded on a permanent blockchain. Without considering the energy consumption derived from the number of computers needed and their power. For instance, according to blockchain.info, the bitcoin net makes new calculations over 1019 times per second; a standard computer processor carries out109 operations per second. So, in many cases, a centralized system is the best answer in terms of costs/efficiency ratio.

What about BIT, instead? What we need to wonder about this time is not “ What is the potential of this technology?” but rather “ Does it make sense for people to obtain what they want to obtain by using the blockchain?”. It may be worth it when it comes to exchanging data within and among institutions. Let’s take into consideration data belonging to governmental departments, for instance. In this case, however, there may be problems of confidentiality, privacy and mistrust. Data stored by companies regarding their customers’ habits may also be useful for third parties, but they are too precious to be given away for free. And then? Whether we are talking about the pure Blockchain or the BIT, their efficiency can be increased but before diving into a new technology we’d better adopt a more objective approach, assess targets and proceed only if it is really worth doing it.

What do you think about the Blockchain and BIT? Tweet @agostinellialdo.

To find out more about the digital world, you may read my latest book: “People Are Media” 

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