The correct usage of Blockchain to avoid any hype usage

Blockchain is a hype technology nowadays. The financial sector is shaking and fearing the last years of their existance and what comes with every hype technology is hype use cases which were created by companies in order to sell it to customers who do not understand the technology but somehow want to be “up-to-date”.

To get a better knowledge about Blockchain you have to dive deep into it to truly understand it. It is not an easy technology to get within seconds. My thoughts: Most of the videos and articles google gives you can not describe what Blockchain is.

Simplifying it: Blockchain is a sort of a database. It can store data in a special “Blockchain-way”. And this is where it gets tricky: Just to store data, it is easier to store data in a SQL database, NoSQL database or other. They are faster and get stuff easier done.

A good use case for Blockchain is one where data needs to get verified by peers. So the only reason to use Blockchain to save data is to gain trust.

Three use cases:

Use case one is a bank. By transfering x money from one bank account to another, the bank takes care that one side has x money less and the other side has x money more. And they might be charging you for it or it takes some time (maybe a day or two or even more). Technology can leverage this by minimizing costs and doing it almost just in time. A bank here is some sort of a trust center. Both parties trust their bank to do this in the right way. To eliminate the third party – everybody needs to trust the technology.

Use case two is an election. Ultimatively the counting of votes are done by the government. But who takes care that they do it right? Who can observe it? With technology the counting can be automated and investigated by everyone afterwards. Trust again is the major driver.

Use case three is notary. Buying a house in Germany needs a notary to verify it. Technology can verify it too and everyone can check who owns this house or property. This speeds processes up and minimizes costs.

All of this is done with the decentralization of datasets which are connected. Not one person, organization or similar holds the data sovereignty, but as many people can save this data when they just want to do it. If someone manipulates a dataset in one blockchain on their local environment, all the other peers have an unmanipulated version of it and can therefore prove what is wrong and what is right.

Just to store data in a modern way, Blockchain is not a solution. There are way better options which are simpler and faster.

Blockchain is for gaining trust where normally a third party will guarantee trust. This third party trust costs and the process is slower and more complicated. Blockchain is not just for saving data.