Blockchains are just better public databases and are here to stay
If you are reading this note you've probably heard about blockchain technology and its most known representative chains (products) like Bitcoin, Ethereum, and maybe even Solana. I'm talking blockchains as underlying tech here, not currencies attached to them. For the purpose of this note, I will assume you've heard about what blockchain is and have at least a rough understanding of how it works.
I will especially assume that you understand that public blockchains are open-source in nature, they are (more or less) decentralized and permissionless, i.e. anyone can use them, build on them, read them, and basically participate in any way they want without the need to seek permission from some central gatekeeper or authority.
I'm sad that I am still getting a lot of surprised looks from tech and business people when the discussion turns to blockchain technology and crypto. It is purely a misunderstanding and a lack of time to study and understand what blockchain really is and how it can be used.
As a simple start, I always say that blockchains are just an evolution of the private databases. Evolution into much larger, more transparent, open, and much more usable storage of information.
When I started in business, private databases were exponentially growing and adding new features to analyze and manipulate data, but the biggest deal was how to automatically connect information sources among companies; manufacturers with suppliers, retailers with wholesalers, hospitals with insurance companies, banks among each other, energy companies with clients, etc.
The problem was (and still is) that everyone had some data in their own database, it was hard to say if the data was 100% correct and because of security, legal and technology reasons it was really difficult to freely share data with others - who might have the same data duplicated in their database, or might have different data about the same entity, or they might even be original creators or owners of that data. To make the mess complete, it was never sure who was the ultimate decision-maker about data correctness and validity.
So we came up with ways to connect "our" and "their" data via exports, via email, via EDI, then APIs became a thing (and still are) but these were all just plaster on the growing need to share information and find a way to validate its correctness.
Enter blockchain tech...
Public blockchains have great utility for many companies and many (not all) types of data. What utility, people always ask;
- first, a company using it pays only for the usage, typically transaction (or gas) fee related to the use of validation and sometimes also extra storage capacity of the blockchain.
This is awesome since you don't have to buy all the compute and storage capacity together with human skills to build it, run it, and maintain it upfront. It will not outgrow your servers and you won't have to replace it every 3-5 years.
- second, everyone else can read the information and use the data (or even programs and apps) written on the blockchain, because it's in principle open-source and they can read them from validated blocks which gives them certainty the data is correct. (it doesn't say it's the correct data, but that's for another time)
This is a breakthrough improvement compared to many internal databases and never-ending efforts to ensure data here-and-there are up-to-date and correct! Not to mention the fact that you create, validate and then update data only once and everyone interested has that last-correct version. You don't need to wait for thousand API calls to finish to hope that data is now correct in all thousand of your business partners' databases.
- third, the composability existing on many blockchains, i.e. ability to reuse existing apps and tools in your own creation, creates an environment where anyone can help you create/build what you need. It can be your partner's IT guys because they have a free capacity or a complete stranger interested in your bounty. And I'm sure you know how not-easy this process is in current business setups.
There's a lot to be said (and figure out) about different blockchains, about their ways of validating "truth" and about apps composability on each one of them, and interoperability among them, but that's for another note.
I'll end here by agreeing with complaints that blockchain tech is evolving relatively quickly, there's a lot to be improved and nobody really knows which chain(s) will be the winners to stay for the long term. But I believe we are close to the point where the first set of long-term winners will be emerging and companies should definitely do more than just observe.
If you are not trying to do sensible projects with selected business partners now, you are late. Make it part of your business, not some "nice to have effort". Don't wait for the "innovation labs" moment as we had it about a decade ago - where first, nobody did anything, and then suddenly everyone wanted to innovate and created their own lab which looked fancy and made great headlines but had a little business impact.
If you enjoyed this one sing-up for next ones and if you wanna share your experience or discuss your projects just hit me up via contacts.