Understanding Blockchain

Insights in the emerging field of peer-powered, distributed data sets

The blockchain is often misunderstood as a technology, either trough misleading communication, unachievable expectations or downright unsuitability for the defined purpose.

As a concept, the blockchain models on decades of distributed, peer to peer experiments and research, such as file transfer protocol BitTorrent and anonymous internet network Tor.

Blockchain Capabilities

Blockchain works by enabling large records set to verify themselves through complex mathematical operations, belonging to the field of cryptography, in a network of computing devices that do not need to enable trusted paths within each node.

Traditionally, business operations and technology relied on allocating a trusted party such as a bank, centralized record center or security certifier which attests the claims help by the party being certified.

As a widely-used example, when you visit ikigai.net, your browser trusts the network connection to be secure, even without prior knowledge of the company behind this platform, because it inherently trusts the certifying middle man organization that issued our certificate.

Blockchain avoids the entire need for a middle man, although at the same time introduces a wide array of new technological and business challenges. The entirety of the recorded dataset is public, and everyone can access, yet to certify claims held on record each node (user) must perform complex cryptographical checks at all times.

In a fast-growing network, where the devices themselves are consumers of technology, rather than part of the active system, the blockchain requirements are too resource intensive to yield the right balance.

Blockchain Weaknesses

Due to the nature of the technology itself, any blockchain product can suffer considerable implementation changes and misunderstood security risk models.

As an emerging technology trend, there is substantial research actively performed on the attack vectors and threat models applicable to the security of distributed products. Such attention also attracts malicious users that are actively exploiting know and zero-day (unknown) vulnerabilities.

Speed and propagation is an architectural challenge faced by any distributed product - as a digital consensus must be achieved on a substantial part of the network, this can have crippling effects on the performance of your application.

Downplaying the Hype and Business Application

Assessing the viability of blockchain in your organization or product comes down to a single question: does your product genuinely need a distributed network?

Your product, service or business can take advantage of peer-to-peer digital payments, custom currencies or decentralized networks and you can explore that as a separate part of your business or the core of your offering. Understanding the difference has a significant impact on your architectural approach and outcome.

Unless your company operates within a field in which centralized technologies are unsuitable for the purpose, it is hazardous to attempt to build a product in an emerging field when you have not yet proven your product-market fit.

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