Alternatives to Blockchain Technology: Businesses Must Be Aware OfFeb 04, 2022 | Ibrahim Imran
Due to the hype of blockchain technology, many might be wondering, is this it? Is this the solution every business needs? Well, you’d be surprised to know that blockchain technology is not the best solution for business applications that require transparency or decentralization.
While that may seem untrue, due to the misinformation surrounding blockchain technology being spread, it seems like an omnipotent technology. Therefore, our post provides you with alternatives to blockchain technology every business must consider.
The Blockchain Debate
Blockchain has taken the corporate world by storm since its modest beginnings as the underpinning of Bitcoin. Businesses all over the world, regardless of industry or economy, are experimenting with new ways to improve their offerings and performance by leveraging the capabilities of blockchain technology.
While the earliest and most viable blockchain applications have emerged in the fields of cryptocurrency, banking, and fintech, there are few real-world examples of blockchain being used in any other industry. This is due to the fact that there is still a lot of doubt about the blockchain's potential to deliver meaningful economic value.
While the suitability of blockchain as a long-term foundation for a unified global transaction system is being debated, the technology still faces a number of challenges before it can be considered for any mainstream application. That isn't to say, however, that blockchain is doomed. It is clear that blockchain is here to stay, given the success and longevity of blockchain-based applications like Bitcoin, Ethereum, and other cryptocurrencies.
Businesses should be aware, however, that blockchain is not an all-powerful panacea that can address all of their problems. Many business challenges can be solved with existing alternatives to blockchain, which are typically more effective and less expensive. These other alternatives to blockchain technology must be considered by businesses to ensure that their investment pays off.
While the idea of a global payments and transactions network is enticing, it is not feasible given the current level of technology. That's because there are a slew of issues with blockchain adoption that must be addressed before it can be considered for all of the applications it could theoretically solve. Scalability, for example, is one of the most significant barriers to blockchain adoption.
While the blockchain network can provide a transparent and immutable record of transactions with decentralized control, it cannot handle the massive volume of transactions that occur every minute around the world.
For example, while existing payment networks such as Visa's can handle thousands of transactions per minute, the blockchain network can only handle a few transactions per second. As a result, there is a huge difference between the sizes of operations that can be done with blockchain and the scales of operations that can be done with existing alternatives to blockchain.
Due to its potential to secure sensitive data in a fully encrypted form, blockchain is also being hailed as a panacea for all security issues. While the rarity of cases of blockchain manipulation and the fact that Bitcoin has survived (or thrived, as some may argue) for ten years suggests that blockchain is not without security and integrity flaws. There are, however, more effective and efficient ways of safeguarding transactions, keeping records, and ensuring privacy than blockchain.
Before picking between blockchain and other technologies, businesses must examine these issues. They should be aware of alternatives to blockchain that can better serve their needs, and only utilize blockchain if it is the only option.
What Are the Alternatives to Blockchain Technology?
So, are there alternatives to blockchain technology out there? Well, yes. Blockchain may not be the ideal solution for businesses right now due to its limitations and the presence of other technologies that can provide similar functions. Small and medium businesses that rely on technology to solve their most pressing problems should avoid succumbing to the hype and adopting blockchain solely on the basis of hype. The following are some blockchain options that firms should consider when investing in creative applications:
Despite the fact that "decentralization" is a popular buzzword in the business and tech worlds, it may not be the solution to all problems. Especially when decentralization is accomplished by copying data across several devices. This in turn makes the entire network of devices inefficient and slow, resulting in a scalability issue and unsustainable energy consumption. As a result, businesses should only use blockchain to achieve decentralization if it is specifically required by their situation.
Due to the "backup" of data stored on multiple nodes, blockchain is also thought to be a good way to build redundant data storage systems. While this may be acceptable for small amounts of data, large amounts of enterprise data that continues to grow over time cannot be replicated across multiple devices. Instead, businesses can use cloud storage services with high capacity and speed that are hosted in top-tier data centers. This will be a far more practical method of data storage than relying on blockchain.
Other Decentralized Ledger Systems
Sometimes a distributed ledger system is exactly what a company requires. If an organization determines that a distributed ledger is required after a thorough analysis of its problem, it should consider alternatives to blockchain technology. Hashgraph is an example of a distributed ledger. Hashgraph can provide businesses with the decentralization, security, and network transparency that blockchain promises. It, on the other hand, does not have the scalability problem and can potentially analyze massive amounts of data in seconds. For businesses that require such functionality, it is one of the superior alternatives to blockchain technology.
With all of the hoopla surrounding blockchain, it can be difficult for organizations not to investigate the technology for any and all applications they can think of. Businesses may quickly identify scenarios where other alternatives to blockchain make more sense if they focus on the problem rather than the technology. It can also assist in finding areas where blockchain can truly bring value, resulting in a higher chance of success and a good return on investment for their blockchain projects.
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