During the last three years, multi-billion dollar banks and financial establishments have centered on constructing systems and platforms based on popular Blockchain technology. However, not any of them has effectively launch the applicability of the Blockchain in huge-scale business operations. One of the problems banks have discovered with Blockchain is that it just operates securely and effectively with its counterpart. If Bitcoin is taken into consideration for example, Blockchain in the Bitcoin protocol and network operates as a database and it is one among many technologies, which underpin Bitcoin.
Replicating the form of Blockchain technology and using it to process transactions without Bitcoin and its other technologies is like removing an engine from a car and expecting it to travel throughout a distance without the presence of different additives including wheels and external frames. Blockchain has not been applied to its complete capability, as banks have not determined a technique of making use of one of Bitcoin’s underlying technologies to their current infrastructure. It could be due to the fact the present infrastructure of banks and economic establishments are old and actually are not well suited with modern technology. Moreover, the main motive is that banks underestimated the tradeoff between capability and protection. When flexibility is prioritized ahead of protection, Blockchain networks cannot be resistant to hacking assaults or external threats, not like Bitcoin or different public networks based on Blockchain.
Andrew Parker, a companion at Spark Capital, which converted numerous early-stage startups such as Twitter, Tumblr, Stack exchange and Foursquare into successful organizations, has noted that Blockchain is overhyped and isn’t relevant to an extensive variety of programs.
Andrew Parker mentioned that Blockchain is a solution in search of an issue and this specific version is not appreciated within the realm of venture capital and early-stage funding. If and startups begin to create technology like Blockchain without a clear business aim or a vision of how to make it more comfortable and secure for customers, it is hard to allocate their finances for economic assist.
Andrew Parker said:
“However, the trend that I find overhyped is the usage of the Blockchain to solve issues that don’t fit this fashionable use case of a set of untrusting counterparties. The trend that has surpassed its prime is the usage of the Blockchain to solve issues which are more easily and successfully solved using uninteresting old open-source database software program.”
The idea of using Blockchain as a database technology is technically correct and conceptually suitable as its motive within Bitcoin is to work as a database, which stores transactions. The fact is that for banks, centralized Blockchain networks will function effectively and with essential safeguards, they will have a few degree of immunity toward external assaults.