Blockchain pros and cons

Blockchain being fairly new technology has a lot of myths and legends circulating around it. But, just as every tech solution, it has its strengths and weaknesses. Today we will go through list of pros and cons of this technology so everyone can have clearer view on the matter.

A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data so it is no wonder that its biggest asset is its secure encryption and tamper proof data storage ability. Sadly, its biggest plus is one of few faults of this encryption type. Once you start ‘mining’ you have to stick to one encryption module, changing it is really hard, same goes for moving of data, if we want to export data to a new blockchain with the correct data models you can find it night impossible, a blockchain doesn’t provide an immediate out-of-the-box exit strategy.

But why would you want to change your encryption system? Currently, blockchain is the safest way to store data, we don’t even have means to break it as it would require quantum computer as well as finding proper exploits. The only logical reason for transfer of data would be unwanted centralization caused by mining farms or ‘forking’ which happens when part of blockchain network breaks off and starts a new blockchain, still, in that scenario, data will remain safe, only downside then would be accessibility, as it can be harder to acquire data after fork. Even fact that data transactions that go through blockchain are taking longer to write down on the ledger seems less of an issue, when knowing that the reason for it is securing data.

If speed is what you going for, faster data transfer can be achieved by going off-chain, transaction made this way will be faster but won’t get recorded in the ledger, making them I fact more private because only two of participants, and sometimes a guarantor are aware that transaction took place. It’s possible because Off-chain transactions don’t change main chain. They are also cheap, usually free but it depends on blockchain, because of low transaction fees off-chain negates problem of ‘Bitcoin Dust’, when amounts of cryptocurrency are so small they are lower than the minimum limit of a valid transaction.

Blockchain is an amazing system that is still in its infancy, so to tell if we can make it an invincible cryptographic system and a key to keeping of our privacy, we need time. Appearance of blockchain spread awareness about how easy it is to gain access to our personal information, and that there are ways to change it. We can’t stop here, I believe that in near future we can find a way to make blockchain even better, for safer, decentralized future.

- Aleksander Witocha