Enthusiastic statements about how Blockchain, the digital book technology that makes Bitcoin work, will revolutionize everything, from how shares are traded to how Walmart Inc. keeps track of where the lettuce head comes from. Well, this lettuce tracking blockchain is coming. But most of the other blockchain projects announced with enthusiasm in recent years have not done so, despite the $ 2 billion invested by venture capital investors in the first half of 2018 alone.
1. Why so much interest for the blockchain?
It is a tool that allows a large number of people or companies to record information in a collaborative way, so as not to alter the data. Commercial transactions are now recorded in millions of electronic databases, each controlled by the company that uses it. (Do you remember Bob Cratchit, a Scrooge employee in "A Christmas Carol," enslaving paper records? The integrity of the information he wrote about the company's transactions was based on the did that only he and Scrooge controlled them.) Blockchain is supposed to open this process.
2. How does the blockchain work?
While a multitude of independent computers deal with transactions, information is overwritten into chronologically organized data blocks. These blocks are then chained with codes indicating that the command has been verified by the computer network using the system. The Bitcoin blockchain, for example, is used to record transactions and make sure no one is trying to spend a digital token twice.
3. How else to use the blockchain?
Blockchain boosters claim that it can speed up transaction times wherever information is spread across separate databases that do not communicate and that this transparent sharing of data could save money. The closing of a real estate transaction, for example, can cost thousands of dollars, a sum of money going to parties such as securities companies. A number of startups have worked with governments in countries such as the Republic of Georgia and Franklin County, Ohio, to test the use of the blockchain to record titles.
4. What is Walmart doing?
Its digital registry, developed by International Business Machines Corp., will allow vendors to capture much more detailed information than Walmart could compile and manage if it managed the database separately. Walmart wants its US suppliers of fresh leafy vegetables to use the chain of blocks to track their products at every step of the supply chain. After several years of testing, the system will become mandatory for leafy vegetables next September, the company said. Among other things, it should shorten response times in cases of foodborne illness and recalls.
5. Which projects did not succeed?
ASX Ltd, which operates the main Australian national stock exchange, has announced the establishment of a blockchain-based clearing and settlement system within 18 months. It was two years ago. The system is expected to be installed by the end of 2020 or early 2021. Australian mining giant BHP Billiton Ltd. announced in 2016 that it would deploy a chain of blocks to track rock and fluid samples in early 2017. This did not happen. and the company does not currently have an ongoing blockchain project.
6. Why did the blockchain not catch more things?
It has not yet been proven for uses other than tracking crypto-currencies and digital coins issued by startups to raise funds. According to a study by PricewaterhouseCoopers LLC, only 15% of global companies have a blockchain project live, while 10% are currently testing this technology. Forrester Research Inc. estimated that 90% of blockchain experiences in business would not be in business use. One of the problems is that blockchains are even slower than necessary. The Bitcoin blockchain processes seven transactions per second, compared to tens of thousands for Visa Inc. Integrating the blockchain with existing software systems can be complicated and expensive. Bringing companies to cooperate in a sectoral blockchain proves to be a daunting challenge. And public blockchains like Bitcoin, which can be seen and used by everyone, face another challenge.
7. What particular problem do public blockchains face?
They are not sure of finding lucrative uses. Take Bitcoin rival Ethereum. It has been designed to excel in so-called decentralized applications, or applications, such as news services, social networks and token-based games. About 2000 dApps are already running on Ethereum only. But they are still barely used. Even one of the most popular apps ever released – CryptoKitties, a game in which players create and collect virtual chats – usually only attracts a few hundred players a day.
8. Could blockchain be just a fad?
Is part of the money poured into the blockchain in search of its novelty? Probably. But it is likely to find many uses, although it will not replace all existing databases, as some had originally thought. Areas in which blockchain could reduce costs and reduce inefficiencies include international fund transfers and food and pharmaceutical supply chains. It is possible that this may work in the background of many new websites, such as social networks that reward their users for writing their blogs: Steemit is already one of the most successful blockchain applications, and c she does. In the corporate sector, IBM and Microsoft Corp. have captured 57% of the blockchain products and services market, valued at more than $ 700 million, WinterGreen Research Inc. said earlier this year.
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