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Trustless Blockchains Are Yet to Come

Blockchain technology is finding barriers to acceptance among global corporate institutions. Lack of trust among users represents one of the biggest hurdles to full acceptance.

So what?

The real problem is that blockchain-based applications make transactions immutable; hence, corporate users feel they will never be able to rectify mistakes, or, worse, that any transaction in the blockchain must be taken for granted.

So the trust issue relates to receiving from potentially risky business partners transactions that—once on the blockchain—should be blindly accepted. The inability to refuse a transaction that was exchanged on blockchain and that was subsequently identified as fraudulent heightens the sense of risk that the technology is supposed to remove.

The natural question then arises: Why use blockchain-based applications with trusted partners if I already trust them? And why use it with risky partners, given that fraudulent transactions can still happen?

The answer to such legitimate questions is that blockchain does not avoid fraud, but it certainly keeps track of any fraudulent activity. This is a very important feature that corporate users should leverage: Alongside the usual paperwork (considered safe) they should start “storing” digital signatures (aka “hash digests”) of those documents on blockchain. Disputes could be managed as usual (i.e., on paper), though the digital equivalents will make it easier and much safer.

The transition to blockchain-based applications will take time and patience, and perhaps much more than what is really needed. This will represent the threshold between successful players (i.e., those who will accelerate adoption) and leftovers (those who will “wait and see”).

 

Comments: (1)

Larry Plonsker
Larry Plonsker - Patent Marketing LLC - Lake Worth, Fl 05 September, 2018, 22:00Be the first to give this comment the thumbs up 0 likes

Your comment about "storing digital signatures of documents on the blockchain" has been in practice on an existing blockchain website for several years.  See PEDDAL.com, Public Electronic Document Dating List.  This method has been the subject of patents, 7,904,450, 8,135,714 and several others.  These patents do not get picked up in blockchain searches because the word blockchain was not invented yet.  The inventor used Integrity Verification Code (IVC) as the hashed fingerprint of the document and Document Dating List (DDL) as the blockchain.  Links to the invetor's patents can be found on our website, www.patentmarketingllc.com.