Blockchains are less buzzworthy than they were a couple of years ago, and for good reason — the price you pay for a blockchain’s immutability compared to the price of a database plus human oversight isn’t worth it. Jesse Frederik wrote about the decline of blockchains for The Correspondent:
Out of over 86,000 blockchain projects that had been launched, 92% had been abandoned by the end of 2017, according to consultancy firm Deloitte.
Why are they deciding to stop? Enlightened – and thus former – blockchain developer Mark van Cuijk explained: “You could also use a forklift to put a six-pack of beer on your kitchen counter. But it’s just not very efficient.”
I disagree with one of his points about bitcoin, arguably the only successful blockchain application. He writes:
OK, so with bitcoin, banks can’t just remove money from your account at their own discretion. But does this really happen? I have never heard of a bank simply taking money from someone’s account. If a bank did something like that, they would be hauled into court in no time and lose their license. Technically it’s possible; legally, it’s a death sentence.
In 2013 residents of Cyprus found that their bank savings had been instantly reduced by 10% when the government decided to take it. And the IRS regularly orders banks to hand over money from the accounts of people who owe taxes. No one can take bitcoin without having the private key to authorize a transaction.
Aside from that quibble, this article foes a good job of explaining all the reasons why a regular old database is almost always better than a blockchain.