Isn't Blockchain overestimated?

[casey15]

The Blockchain technology is often presented as a revolutionary solution that can be applied on multiple industries and can bring a lot of transformations (I for one sill think that). This transformation can range from finance and supply chain down to healthcare and even governance. I think this came to be because of the association of Blockchain with transparency, security and decentralization. But with all this, aren't we still overestimating what Blockchain can realistically solve?
Blockchain really have a lot of benefits, from it's decentralization to it transparency down to immutability.  Blockchain technology tends to be very effective on situation where multiple parties don't trust each other, or when there is need for verifiable and tamper proof records or  when centralization of a system poses risk. In these aspect you will agree with me that Blockchain has a huge advantage over traditional systems.
     But despite all these benefits, I think sometimes we tend to make unrealistic conditioning for the use of Blockchain technology.
Not every system requires the use of decentralization especially when the central authority already exists and is trusted. The implementation of Blockchain can make simple systems technical and can bring about unnecessary operational complexity. Truth be told, I do feel like Blockchain systems tends to be slower in some cases. For example in gaming, online games needs instant response from inputs and block confirmation takes time and is not really suitable for very fast interactions.. another example us in the storage of files.. while Blockchain can make it tamper resistant, it cannot authentic if the document was correct in the first place. So of a wrong document is stored on the block, you simply cannot change it..


I'm not trying to downplay the use case of Blockchain technology, I'm just trying to point out that sometimes the hype can be too much and unrealistic.

[Mia Chloe]

The Blockchain technology is often presented as a revolutionary solution that can be applied on multiple industries and can bring a lot of transformations (I for one sill think that). This transformation can range from finance and supply chain down to healthcare and even governance.

You are making a point but it's not spot on. Fact is decentralization is just a type of Blockchain characteristics which simply means all Blockchains are not decentralized infact we have more centralized networks than decentralized networks.  A good example is thether on Tron network for example.

Your coins can be frozen there with legal order but for bitcoin it's impossible which shows decentralization and that comes from the consensus and how the network is structured. If there's a central body running it back end with full authority then it's centralized.

[stwenhao]

Isn't Blockchain overestimated?

Of course it is. Some example of that is "blockchain voting":

Voting needs a blockchain like fish need a bicycle.

There are plenty of challenges for voting,  and not only do blockchains not solve *any* of them, they actively undermine the parts that have been solved like making it hard to coerce someone or making it hard for people to sell their votes.

Blockchain voting is a fine litmus test for careful thinking vs getting caught up in blockchain hype.

Not every system requires the use of decentralization especially when the central authority already exists and is trusted.

Yes. If the fiat system would be better, then Bitcoin simply wouldn't exist. As you can read in the Genesis Block, failures in existing models were literally the input, which pushed Satoshi to start the chain.

Truth be told, I do feel like Blockchain systems tends to be slower in some cases.

Because they are slower. Actually, one of the first criticisms of Bitcoin were related directly to that. In the first implementation, every node had to store everything. And many people thought, that it simply wouldn't scale, and that solving the double-spending problem, by storing each and every transaction, is not a good idea. At that time, people thought that there would be a better way to represent "a coin" in a similar way, as it is done in cash. And then they wondered, how to protect it from inflation, where all digital files can be easily copy-pasted. And now, you can see how: the ability to copy-paste coins is what actually makes Bitcoin stronger, not weaker, because every copy means, that there are simply more nodes.

https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners#Efficiency

If you are OK with 10 or so individuals controlling the currency, then you can design a much better system than Bitcoin. For example, you can design a system using chaumean e-cash with the following properties:

• 20 independent entities are designated as signers.
• As long as a majority of signers are honest, the system remains secure.
• The system has perfect anonymity. The signers cannot know anything about the flow of money.
• Transactions are instant, requiring only communication with the signers and a small amount of computation.

If you want to preserve the mining mechanism, you can create a simple proof-of-work block chain which simply determines the current signers and creates coins. Users of the system would look at the most recent blocks only to determine the public keys and IP addresses of the current signers, and then use the system as previously described.

This system would be better than Bitcoin in several ways. But the point of Bitcoin is to be decentralized, so Satoshi rejected this idea (which has been well-known for over 20 years) and created Bitcoin instead.

online games needs instant response from inputs and block confirmation takes time and is not really suitable for very fast interactions

It depends which games. For example in some card games, you have to download all possible cards from the server, and it feels a bit like Initial Blockchain Download. Because if some player will put "Blue Eyes White Dragon" on the table, your client has to recognize it correctly.

another example us in the storage of files.. while Blockchain can make it tamper resistant, it cannot authentic if the document was correct in the first place

Even if you think about it outside of the blockchain, then still: all you can do, is to require a signature from someone, who will confirm, that it is correct. But is the file actually correct? You never know, all that can be done is checking, if someone signed it.

[Ambatman]

Good points by the way
But Blockchain are usually pushed by people that want decentralisation
People that don't trust a central authority
Many are just implementing it becomes it sounds innovative.
It cost more in a centralised system where trust is already existing.
It fits more on trustless and decentralization.
But they can make use of permissioned Blockchain in most cases ( even Banks can).

[mcdouglasx]

another example us in the storage of files.. while Blockchain can make it tamper resistant, it cannot authentic if the document was correct in the first place. So of a wrong document is stored on the block, you simply cannot change it..

That's precisely the oracle problem, but the real bottleneck isn't the blockchain itself, but rather how to feed it with reliable, real-world data. Until we solve the oracle problem in a practical and decentralized way, many applications will continue to rely on a central source of trust, exactly what blockchain aims to eliminate. From my perspective, blockchain works perfectly for Bitcoin and cryptocurrencies in general. As you yourself mentioned, it does have compatibility issues with many other systems, and that's not necessarily a bad thing. We shouldn't view blockchain technology as a universal solution.

[Mia Chloe]

But Blockchain are usually pushed by people that want decentralisation
People that don't trust a central authority
Many are just implementing it becomes it sounds innovative.

I don't agree fully with this. Both those that want centralization and decentralization can push the block chain agenda but it doesn't mean automatic decentralization. Instead it depends on the network structure and who is eventually holding power here. If there's no shared power with all users it's the opposite (centralization).

Yes. If the fiat system would be better, then Bitcoin simply wouldn't exist. As you can read in the Genesis Block, failures in existing models were literally the input, which pushed Satoshi to start the chain.

The fiat system started to fail and bring bigger inflation effects when banks got greedy and switched from valueables like gold at the time to paper money. Still at some point technology was going to still evolve to the current digital level.

[zeuner]

Not every system requires the use of decentralization especially when the central authority already exists and is trusted.

I would argue that the "existing and trusted" situation often stems from the lack of visible alternatives. People are used to a central authority being necessary, so they don't know better. Later, they might be surprised about the problems that can arise from centralization. Take for example Twitter/X where you can see how disruptive centralization can be. As long as a platform is centralized, there is always the possibility of someone buying it and acting contrary to what users trusted in before. Decentralization does indeed add complexity, but on the long run, it might be the more sustainable alternative.

However, blockchain does not guarantee decentralization. Most likely, the major part of today's blockchains are quite centralized, obfuscating the centralization at best. But it is a vehicle that _can_ help achieving decentralization.

[BlackHatCoiner]

If blockchain technology was beneficial on supply chains or healthcare, wouldn't it already have been implemented and used across the world? It's been 17 years since the creation of Bitcoin, and at least 10 years since the development of alternative blockchain networks, but we have yet to see a value proposition of this technology other than Bitcoin.

With the Internet and AI, markets now shift in months. If blockchain was actually useful for anything other than permissionless, globally accessible hard money, it would already have found application there.

[ertil]

If blockchain technology was beneficial on supply chains or healthcare, wouldn't it already have been implemented and used across the world?

Well, there is an example of a non-mined blockchain, which is older than Bitcoin: it is called "git". Each commit refers to the previous one, and even the initial commit points to SHA-1 of all zeroes, just like the Genesis Block does. If you compare for example regtest, and git, then you will notice, that they are similar.

If blockchain was actually useful for anything other than permissionless, globally accessible hard money, it would already have found application there.

And it happened: people now use it to store data, thinking that each node will keep everything forever. But: if more and more users will use only SPV wallets, then it will be harder and harder to get historical data. The trend is clear: some people now want to rely on UTXO proofs, shared in a P2P way. And even if Bitcoin Core won't implement it, then still: it will happen sooner or later, because this idea is well-known for years, and if running a node will require too much effort, then many people won't stop running them completely, but will simply switch to a weaker security model, which would be faster, than the original implementation.

It is a similar thing, as with transaction puzzles: we should have DLEQ proofs with N-bit elliptic curves, where everyone would be able to trace the real progress of breaking secp256k1. And instead, we just have some centralized puzzles, where everyone trusts the creator of the initial transaction. Why? Because deploying it in a centralized way was easier, and we are now stuck with it.

And many people thought, that it simply wouldn't scale, and that solving the double-spending problem, by storing each and every transaction, is not a good idea.

Well, if it wouldn't scale in a decentralized way, then it would happen through more centralized channels, and the history would simply repeat. For example, now some people start to notice, that if Lightning Network requires solving disagreements on-chain, then it simply inherits many on-chain limits as well. Who knows, maybe after some time people will understand, that as long as we have "layer one and a half", instead of a proper "second layer", then some people will endlessly keep talking about the block size limit, because it will always hit all of these half-baked layers. Things would scale, only if users would be able to create, send, receive, and burn coins, entirely in the second layer, without touching the main chain, like in sidechains. Otherwise, they will always hit some limits, just like C++ language is limited by what C language can do.

To sum up, as you can see, it is always a spectrum of things: centralized fiat systems were weak, so when they collapsed, then Bitcoin was created. But then, Bitcoin required handling everything by everyone, to really make things trustless, and then it turned out, that being your own bank is too hard for many users. Which means, that the history will probably repeat here as well, and most users will pick SPV wallets, centralized exchanges, and treat block explorers as a source of truth, until they will collapse, and this circle will start yet again.

[ABCbits]

If blockchain technology was beneficial on supply chains or healthcare, wouldn't it already have been implemented and used across the world?

I believe phrase "If it ain't broke, don't fix it" apply here. Many usage or application don't really need decentralization, so traditional database with either website or API to manage and share the data are good enough. I also expect some stuff that claim to use blockchain actually doesn't use blockchain at all or used much less than they claim.