Before approving blockchain projects, businesses must consider the alternatives to blockchain that are now accessible.

Blockchain has swept the corporate world from its mysterious beginnings as the basis of Bitcoin. Businesses worldwide are looking at new ways to use the possibilities of blockchain technology to enhance their services and performance, regardless of the industry or economy. There are few examples of blockchain being used in any other business, even though blockchain’s first and most practical uses have evolved in cryptocurrencies, banking, and fintech. There is still much doubt over the blockchain’s capacity to produce actual business value. There are still many obstacles that the technology must overcome before it can be considered for any widespread application, notwithstanding the ongoing discussion about whether blockchain is suitable as a long-term foundation for a unified global transaction system. But that doesn’t imply that blockchain doesn’t have a future. Blockchain is here to stay, as proof by the popularity and survival of blockchain-based applications like Bitcoin, Ethereum, and other cryptocurrencies.

However, companies should be aware that blockchain is not a magic bullet that can fix all of their problems. Existing alternatives to blockchain technology can often solve business challenges more effectively and affordably. Businesses must consider these possibilities to make sure that their investment pays off well.

What can be done with a blockchain?

Theoretically, blockchain might be applied to applications that require decentralization, transparency, and immutability of records. As a result, it is well suited for industries like banking and finance, where transparency is becoming increasingly important. Both traditional and emerging banking and financial services businesses are considering using blockchain in payments and other areas of banking and finance. These companies intend to use blockchain to streamline payment networks, particularly peer-to-peer (P2P) transaction networks. By using blockchain to streamline these networks, all financial transactions would be carried out directly between the parties involved without any organization needing to control or monitor them.

Law is another area where blockchain can now be employed. Legal cases involving many parties who have voluntarily agreed to a contract are common in law. These disputes frequently arise in business and commerce and can be quickly settled by executing smart contracts, a blockchain technology derivative. Smart contracts are computer programs that automatically carry out contracts that both parties have agreed to whenever the predetermined circumstances are satisfied. Additionally, there is no need for third-party verification because the smart contract is activated by data on the blockchain, which is intrinsically unchangeable and hence an unquestionable source of truth. It also does away with the requirement for a dispute and a trial. This would make it possible for international legal organizations to concentrate on more important problems, work on cases with humanitarian causes, and handle other graver situations.

Similar to how it appears to be the ideal solution for many other applications, enterprises, and industries, blockchain offers decentralization, transparency, and data integrity. Businesses shouldn’t dismiss the blockchain’s restrictions, though, which render many of its applications unfeasible or infeasible.

What Applications Cannot Use Blockchain?

Despite how enticing the idea of a global network for payments and transactions may appear, given the current level of technology, it is not feasible. This is because before considering blockchain for all the applications it may theoretically be able to solve, there are several hurdles to acceptance that must be overcome. Scalability, for instance, is one of the main obstacles to blockchain adoption. The vast number of transactions that occur worldwide every minute is too much for the blockchain network to handle, even though it can provide a transparent and immutable record of transactions with decentralized control. For instance, a blockchain network can only manage a few transactions per second, whereas traditional payment networks like Visa can process thousands of transactions every minute. As a result, there is a huge discrepancy between the operational sizes that blockchain can support and those of its existing alternatives.

Also read: Electric Capital Launches $110 Million Fund Focused on Blockchain Businesses

Due to its capacity to store sensitive data fully encrypted manner, blockchain is also being hailed as a solution to all security issues. Despite the rarity of instances of blockchain tampering and the fact that Bitcoin has endured (or, as some could argue, thrived) for ten years, blockchain security and integrity may not be particularly weak. However, other transaction security, record keeping, and privacy protection methods may be more efficient and successful than blockchain.

Such elements must be taken into account by businesses when choosing between blockchain and other technologies. They should be aware of blockchain’s competitors that can better meet their needs and only utilize blockchain if no other technology can.

Saying there are some applications to blockchain if you’re not interested in true decentralization is like saying that a bulletproof vest can be used as a beach towel.

Yes?

There’s faster, cheaper, robusterer databases for every other use of blockchain.https://t.co/qC0cRH4qq3

— Jeremy Poley (@JeremyPoley) September 12, 2022

Alternatives to Blockchain That Businesses Need to Know

The use of blockchain may not be the ideal choice for businesses now due to its limitations and the existence of other technologies that can provide comparable functionality. Avoid becoming swept up in the euphoria and embracing blockchain driven solely by hype, especially for small and medium businesses that employ technology to help them address their toughest difficulties. While investing in cutting-edge applications, organizations should also take into account the following blockchain alternatives:

1. Consolidated databases

Even if “decentralisation” is a term in the business and tech world, it might not be the solution to every issue, particularly when decentralization is accomplished by copying the same data across various devices. As a result, the entire network of devices becomes ineffective and sluggish, which eventually causes scalability issues and unacceptably high energy consumption. Therefore, enterprises shouldn’t try to transition to decentralization via blockchain unless expressly necessitated by their circumstances.

2. Online Storage

Due to the “backup” of data being saved on various nodes, blockchain is also thought to be an excellent approach to constructing redundant data storage systems. While this might be OK for small amounts of data, it is impossible to replicate across several devices the vast amounts of enterprise data that keep rising over time. Instead, companies can choose high-capacity, fast cloud storage solutions in top-notch data centers. This will be far more practical than relying solely on blockchain for data storage.

3. Additional Distributed Ledgers

Businesses might genuinely require distributed ledger technology in some cases. If, after carefully examining its issue, a company decides it needs to use a distributed ledger, it should consider alternative options. Hashgraph is an illustration of such a distributed ledger. Hashgraph can provide enterprises with the decentralization, security, and network transparency that blockchain promises. It can theoretically process extremely large numbers of transactions in a matter of seconds and does not suffer from the scalability problem. This makes it a better option than blockchain for companies who need this capability. Businesses may find it difficult to resist investigating blockchain technology for every use they can think of, given the excitement the technology continues to receive. But firms may quickly spot situations where other blockchain solutions make more sense if they concentrate on the issue rather than the technology. As a result, their blockchain projects have a higher chance of success and a higher return on investment. It can also assist in finding areas where blockchain may truly bring value.