Advantages and disadvantages of blockchain

"How to use blockchain" Part 3 --- Will blockchain solve all problems? I will explain with a concrete example.

Benefits of blockchain

The feature of blockchain is that once recorded information cannot be tampered with. The virtual currency "Bitcoin" uses this feature to record transaction history, and realizes a highly reliable ledger that is not tampered with.

In addition, blockchain is an autonomous decentralized system, and its reliability can be guaranteed not by trust in the operator but by a mechanism. As a result, it is possible to share a highly transparent ledger that does not depend on a specific business operator with a plurality of business operators or an unspecified number of people.

It is expected that this ledger will be used to realize a "smart contract" that manages contract details on a blockchain. The conditions required to conclude a contract are recorded on a blockchain that cannot be tampered with, and are automatically executed when the conditions are met. Since the contract is strictly executed according to the pre-defined conditions, the contract does not require mutual trust or the mediation of a third party, and it is possible to make a direct and safe transaction with a stranger. As a result, it is possible to shorten the time required for the contract and reduce the cost by not going through an intermediary.

Disadvantages of blockchain

However, blockchain cannot solve all the problems. Sometimes you can't.

Due to its mechanism, blockchain cannot delete or change the contents once recorded. Therefore, it cannot be used to record information that needs to be changed or deleted as needed. A typical example is personal information.

Personal information needs to be deleted according to the request from the individual, but once it is recorded on the blockchain, this request cannot be met. When using a blockchain for purposes related to personal information, it is necessary to record only the information to be linked with the personal information on the blockchain and store the personal information itself in another database.

Also, blockchain is not suitable for use within an organization. Since all the computers (nodes) that make up the blockchain are under centralized control within a single organization, the merit of not being tampered with is not guaranteed.

Blockchain has the disadvantages that the amount of data continues to increase and that it is not good at high-speed processing. Considering these points, the use of blockchain in a single organization is limited.

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Advantages and disadvantages of blockchain