Monday, May 16, 2022

When blockchain can be used in a project?


When is blockchain actually required and when can a web2 startup can replace blockhain based projects.

  • Data integrity - When there is a need to make sure that the data itself has some integrity associated with itself. This means that data cannot be corrupted or incorrect data manipulation should not take place in order to suit any specific party’s demands.

  • Provable Time Linearisation. Time linearisation in mathematical terms means anything means that increases / decreases with respect to the time, say f(t) = at + b so the idea that anything needs to have consistence provable time linearisation say applications like Dollar Cost Averaging or anything that changes with respect to the time then we need the function the f(t) that needs to be verified by a consensus algorithm. Now in a blockchain, this happens by deterministically increasing the block number with a given time stamp and provably linked timestamps (and made sure that they are verified by consensus algorithm with high economic incentive)

  • Censorship resistance, Now, every piece of information on chain is a new block while it can be creation, updation or deletion so it is ensured that no data gets lost ever. The idea that blockchain data is censorship resistance means that the data can never be corrupted and manipulated in a way to suit the needs of certain entities. Everything is a new block which is verified by consensus algorithm with high economic incentive.

  • Double Spend Protection, The idea that one can spend twice on chain but it would be recorded so on chain data. The idea is that when you make an transaction there are multiple fields that are required and of them is nonce, the idea is that if two transactions are broadcasted with exact same parameters then based on number of confirmations (probably dependent on time of broadcast and gas fees), the one having more number of confirmations will be accepted while the other will be rejected.

  • Inherit Layer 1 security Layer 1 can provide consensus and security, so if there is an asset that is deemed to super valuable for the community then then layer 2 can add scalibility where as layer 1 gives the necessary security.
There is no point of needlessly integrating blockchain in a project it is not meant to.