Who actually needs a private blockchain network?

Blockchain is still relatively new tech, and while the mania of 2017 has mostly cooled off, it’s still tricky to know where blockchain helps and where it doesn’t. For the most obvious example: Banks do not need or want cryptocurrencies (For now). When you have money with a bank, yes they do allow you to send/withdraw money from your account, but while it’s stored with the banks it’s basically just an IOU.

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Sort of like cryptocurrency exchanges, since you don’t hold your own key. But what banks do have is the power to reverse or block transactions — a power they use often, and which they need to have to be able to comply with local regulations. If a government tells a bank to freeze Steve’s account, the bank has to actually be able to do it, and to roll back any transactions Steve did make recently.

What blockchain does is it enables trust and immutability. It enables trust by taking central authorities out of the picture. Even with centralized blockchains like Vechain, the company can exert power on the network going forward, but they can’t turn back time for anything that happened in the past.

As to who needs/could benefit from using a private chain, well, I think it’s best to look at the companies that develop blockchain solutions, and who they are targeting when trying to sell that service. Insolar is a great example. They have a clean site and get straight to the point. The services they offer include building customized blockchains to help businesses streamline (And so save money on) their bureaucracies.

They also lean heavily on supply chain/logistics. And this is actually one of the areas where blockchain shines the most. By recording logistical chains on the blockchain, you create a reliable record of the flow of events, which allows third parties to trust you if something goes wrong or needs to be audited or verified as genuine. Information in a centralized database can change. Info on the blockchain cannot.



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