Beyond coins: when is blockchain useful?
What you will learn
Choose one use beyond coin trading. Name a possible benefit, a data source that must be trusted, and a reason to prefer a conventional database.
A shared ledger can help organizations coordinate information; it does not turn false data into truth.
Blockchain can record transfers of digital items or evidence that documents existed. When an application needs external facts, such as a delivery arriving, it uses a data source called an oracle. If that source is wrong or dishonest, even correct code may act on false information. Ask who supplies data, who can change the rules, and what costs and privacy trade-offs exist. A conventional database is sometimes more suitable. Useful technology does not guarantee a rising token price.
A sensor incorrectly reported that a shipment stayed refrigerated. Recording the report on a blockchain can show what was reported, but cannot prove the shipment was actually cold.
Choose one use beyond coin trading. Name a possible benefit, a data source that must be trusted, and a reason to prefer a conventional database.
Ethereum.org · Oracles ↗Check your understanding
A sensor wrote incorrect data to a blockchain. Does the record prove the data is true?
- Yes, always
- Yes, if there are many blocks
- No, the ledger alone does not verify reality
Answer and explanation
No, the ledger alone does not verify reality. A record being hard to change does not make its content true.
When should blockchain be considered?
- For every app without checking
- When a shared ledger is needed and benefits justify costs
- Only because a coin’s price rose
Answer and explanation
When a shared ledger is needed and benefits justify costs. Consider the need, trust, privacy and cost rather than just the technology’s name.
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