Blockchain: Are We Early or Late in Its Lifespan?

Fazzaco has covered the story of we.trade, a blockchain fintech, shut down operations in June​. Put into business in 2019, the fintech used to brand itself as "a digital one-stop shop" for supply chain trade.

Today, Fazzaco talks about the blockchain, a technology seems to be highly tied to cryptocurrency, and its concerns.

Fazzaco to Launch Business Awards 2022​

​Decentralized distributed database

Many people believe that the creator of bitcoin, an anonymous anarchist, who claimed to be "Satoshi Nakamoto", invented the blockchain. In a sense, many regard bitcoin, or cryptocurrency in general, and blockchain are the same thing. In fact, blockchain goes back to an even earlier day, and people usually believe that W. Scott Stornetta is the "Father of Blockchain", who is also a famous figure in cryptography and distributed computing. He first mentioned a blockchain structure in a paper he co-arthored with Haber, which describes a digital system dubbed "the blockchain".

To put it simply, people have created a distributed system in order to avoid a single point of failure (SPF) in the transaction system causing the entire system to collapse. In addition, blockchain is also known for immutability, consensus, voting mechanism and so on.

Where are we in the lifespan of blockchain?

We have seen too many people "claiming" to revolutionize a certain field these years. Words like game-changing, re-invent, re-define are becoming abused and unsurprising, and difficult to once again make people look forward to a new technology or product.

Since its emergence in 2009, blockchain has basically been deeply tied to cryptocurrencies. Cryptocurrencies are known for being decentralized, and the creator of bitcoin, "Satoshi Nakamoto", also expressed that he was motivated by his concerns about governments and large banks controlling people.

Although the blockchain solves the double-spending of the decentralized digital currencies in a very ingenious way, the technology itself is still highly impractical.

I.

Transactions cannot be undone. This is a massive issue that cannot be neglected, for it simply raises the cost of even a tiny error. Similar to spam, the con artist just need one person who is foolish enough to click on the email. For a crypto theif, all he or she needs is to find one loophole in the security measures of an exchange. The victims of theft have no redress whatsoever because all transactions are final and all entities that might be able to assist, including banks and governments, are excluded.

​The fund senders are not well protected, while the fund receivers are over protected. For this reason, the cryptocurrency becomes a crime-ridden industry.

II.

Private key loss results in a permanent loss of your funds. You are now in an awkward situation because, on the one hand, you want to make sure that your private keys are protected. Because of anarchism, if you replicate it everywhere, it will be stolen and the thieves will transfer it irreversibly to themselves, and there is no way to stop this. On the other side, you are also doomed if the private keys are only stored in a portable storage device, where safety is guaranteed, yet you have no way to spend it. You have no help because the system is decentralized.

​Conclusion

The above only sums up two common issues that exist in blockchain, and the picture only gets complicated when it comes to smart contract and consensus.

Of course, blockchain advocates believe that any technology has a self-evolving process, and blockchain will gradually evolve from bitcoin-supporting only to more rich technology. Just like every new idea, it will improve on its own.

Many think that as the technology revises itself, it can be, too, implemented in many non-financial aspects, such as operational management, digital democracy and digital identification etc.