Blockchain revolution without the blockchain?

Abstract

The technology behind blockchain has attracted a lot of attention. However, this technology is for the most part not well understood. There is no consensus on what benefits it may bring or on how it may fail. A careful look into the technology finds that most of the proposed benefits of so called blockchain technologies do not really come from elements unique to blockchain. Instead, they come from more conventional elements such as encryption and smart contracts. Moreover, even those applications that would benefit from a distributed system may benefit more from a distributed database designed differently than blockchain.

Blockchain-based platforms: Decentralized infrastructures and its boundary conditions

“…Blockchain-based platform, thus, represent an extreme case of "openness" with decentralized governance and a distributed data infrastructure able to disintermediate transaction. Such disintermediation can reduce transaction costs (Halaburda, 2018) and failures inherent to centralized platforms, such as lack of transparency, corruption, coercion, censorship, and excessive market power (Atzori, 2015;Catalini and Gans, 2017). Table 1 summarizes the above mentioned characteristics of centralized versus blockchain-based platforms.…”

“…without which the blocks may be a secure and immutable record of merely some fake assets/incidents (Catalini and Gans, 2017). Keeping a strong link between the two and solving this gateway problem (Halaburda, 2018) increases the cost of verification (i.e. multiple parties and agreed rules to verify the data entry and authenticity of the link) and/or the cost of infrastructure and storage (i.e.…”

“…Nonetheless, implications of the blockchain technology reach far beyond the financial system (e.g., De Filippi, 2017;Li et al, 2017). Consensus protocols, smart contracts, cryptography, and distributed ledgers allow for secure, immutable, transparent, and often cheaper transactions, which can be applied to a variety of contexts (Tschorsch and Scheuermann 2016;Halaburda, 2018). As a consequence, various digital platforms and start-ups have started adopting blockchain technology for micropayments, storage system, intellectual property, financial and physical assets, supply chain and logistics, social networks, media and open science amongst others applications (Li et al, 2017;Davidson, De Filippi, and Potts, 2018).…”

“…Decentralization of governance and data-infrastructure in blockchain-based platforms (Halaburda, 2018) can to a certain extent mitigate centralized platforms inherent problems, such as a higher bargaining power for the platform sponsor, lock-in effects, censorship, data leakage, expropriation, and privacy risks (Catalini and Gans, 2017). Thereby, we discuss conceptually, how the promising properties of blockchain may, in turn, cause other challenges such as coordination and complexity problems, and high cost of verifying and storing transactions in absence of a third party.…”

Current State and Development Trends of blockchain Technology in the Financial Sector

“…Попытки же практического внедрения технологий распределенного реестра в традиционной финансовой сфере, как и везде, по естественным, вышеприведенным причинам пока идут без особого успеха, так как, вопреки ожиданиям, технология не обеспечивает ни сокращения затрат на IT инфраструктуру, не снижает стоимость межбанковских расчетов и не ускоряет обработку транзакций. А такие декларируемые достоинства блокчейна, как безопасность путем использования публичной криптографии, распределенная БД и смарт-контракты вполне самостоятельные зрелые технологии, которые существую независимо от блокчейна и могут быть внедрены в IT инфраструктуру финансовых организаций по отдельности [33]. Вероятно, именно поэтому наиболее успешная компания, декларирующая «межбанковские расчеты на блокчейне», Ripple, как выяснилось, для межбанковских расчетов использует традиционные инструменты, а не блокчейн 13 .…”