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Cheatography

Blockchain Pros & Cons Cheat Sheet (DRAFT) by [deleted]

The Benefits and Challenges of Blockchain

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Introd­uction

Blockc­hain, the backbone technology behind Bitcoin, is one of the hottest and most intriguing techno­logies currently in the market. Blockchain has the potential to disrupt multiple industries by making processes more democr­atic, secure, transp­arent, and efficient.

Pros - Benefits

1. Disint­erm­edi­ation & Trustless exchange
Parties can make an exchange without the oversight or interm­edi­ation of a third party, reducing or even elimin­ating counte­r-party risks.
2. Empowered users
Users are in control of all their inform­ation and transa­ctions.
3. High quality data
Blockchain data is complete, consis­tent, timely, accurate, and widely available.
4. Durabi­lity, reliab­ility, and longev­ity
Due to the decent­ralized networks, blockchain does not have a central point of failure and is better able to withstand malicious attacks.
5. Process integr­ity
Users can trust that transa­ctions will be executed exactly as the protocol commands removing the need for a trusted third party.
6. Transp­arency and immuta­bil­ity
Changes to public blockc­hains are publicly viewable by all parties creating transp­arency, and all transa­ctions are immutable, meaning they cannot be altered or deleted.
7. Ecosystem simpli­fic­ation
With all transa­ctions being added to a single public ledger, it reduces the clutter and compli­cations of multiple ledgers.
8. Faster transa­cti­ons
Interbank transa­ctions can potent­ially take days for clearing and final settle­ment, especially outside of working hours. Blockchain transa­ctions can reduce transa­ction times to minutes and are processed 24/7.
9. Lower transa­ction costs
By elimin­ating third party interm­edi­aries and overhead costs for exchanging assets, blockc­hains have the potential to greatly reduce transa­ction fees.
 

Blockchain Technology

Cons - Challeges

1. Nascent techno­logy
Resolving challenges such as transa­ction speed, the verifi­cation process, and data limits will be crucial in making blockchain widely applic­able.
2. Uncertain regulatory status
Because modern currencies have always been created and regulated by national govern­ments, blockchain and Bitcoin face a hurdle in widespread adoption by pre-ex­isting financial instit­utions if its government regulation status remains unsettled.
3. Large energy consum­ption
The Bitcoin blockchain network’s miners are attempting 450 thousand trillion solutions per second in efforts to validate transa­ctions, using substa­ntial amounts of computer power.
4. Control, security, and privacy
While solutions exist, including private or permis­sioned blockc­hains and strong encryp­tion, there are still cyber security concerns that need to be addressed before the general public will entrust their personal data to a blockchain solution.
5. Integr­ation concerns
Applic­ations offer solutions that require signif­icant changes to, or complete replac­ement of, existing systems. In order to make the switch, companies must strategize the transi­tion.
6. Cultural adoption
Represents a complete shift to a decent­ralized network which requires the buy-in of its users and operators.
7. Cost
The high initial capital costs could be a deterrent but offers tremendous savings in transa­ction costs and time.
           

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