The Disadvantages of Blockchain Technology That You Should Know

  • Written by Danny Seager
  • Published on 2 April 2019
  • Our Voice

Blockchain is, without a doubt, the buzzword of the moment when it comes to supply chain transparency. Segura get asked a lot why we don’t use blockchain technology (so often, in fact, that we wrote a blog on it). The truth is, whilst we recognise blockchain as valuable technology, we don’t feel that it’s right for us or what we do.

What is blockchain?

Blockchain is essentially a chain of… well, blocks. Distributed copies of the transaction "database" are shared between all users of the system, with each block having a unique reference. Once added, the blocks cannot be edited without invalidating the chain. This creates data assurance through consensus between all of the distributed copies of the transactional database. In non-jargon terms, that means that copies of the same data are stored in multiple places.

Why doesn't segura use blockchain?

Segura’s technology works differently to blockchain; we manage all of the data within the system independently for the supply chain owner. This means that we are able to ensure data consistency and validity.

Some of the reasons that we choose not to use blockchain are:

It isn’t always secure

Security is hugely important when it comes to storing data. A common misconception with blockchain is that it’s immutable or tamper-proof. However, when the data is distributed, if >50% (the majority) of users change and replicate the same node of data in a block and rewrite all previous blocks, the data is changed. As an example, if a blockchain is distributed between three people, if two change a node of data to match (a majority) and rewrite the previous blocks, the third persons data will automatically change – it gets overwritten. Our platform gives you one version of the truth, that cannot be tampered with.

blockchain

Blockchain technology is complex

When it comes to implementing blockchain technology, it can be complicated. One of the things that we recognised early at Segura is that it’s important to try to minimise disruption as much as possible. For example, our platform can be integrated with existing ERP and PLM systems to make the process as smooth as possible, and to maximise the amount of data available to users.

It is subject to human error

Humans make mistakes, and it can be pretty difficult to avoid them. As with most systems, if the information entering the blockchain isn’t of high quality then the resulting stored data won’t be trustworthy.

Whilst this certainly isn’t a fault that is limited to blockchain, it also isn’t a fault that blockchain has managed to overcome.

Whilst there are undoubtedly advantages to using blockchain technology, and it has really highlighted the need for supply chain transparency, it isn’t without its disadvantages. There are claims that blockchain is one of the most overhyped technologies ever, with its uses being limited.

We never say never at Segura but currently, blockchain isn’t the right choice for us.

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