Blockchain has many curiosities, which helped its fame to rise a lot lately, mostly due to enthusiasts of the crypto world, such as Bitcoin, Dogecoin, and Ethereum. But this has also been noticed by many inside the business sector, who see it as an opportunity to create more transparent and integral transactions.
Although its fame and promising prospect, the methods of adopting Blockchain have been pretty slow. One of the biggest reasons is the lagging performance, where transactions could take up to an hour to realize. That’s why some companies have been looking for efficient and reliable alternatives to Blockchain.
Best Alternatives to Blockchain
Some technologies, such as cloud storage and distributed databases, can provide features related to what Blockchain does. They can work for data integrity and a few reliability advantages while using fewer resources, being more efficient, and less performing.
Many business companies have started to adopt them because they want to reduce costs. Meanwhile, others believe in the simplification of their development. Moreover, integration challenges are also greatly reduced by using these tools.
It is critical that these resources include centralized databases and decentralized storage in order to achieve a good promising alternative. In addition, its technology should use the same distributed ledgers that Blockchain uses.
These are some of the best alternatives that could somehow replace blockchain features while offering similar resources:
By its nature, decentralization adds overhead while maintaining multiple copies of data, which ensures consistency. These blockchains also add significant computational needs, as well as many energy consumption issues.
While newer Blockchain communities are becoming better and better every day, their performance is still a bit pale to what it’s possible to achieve with centralized databases. For example, Visa Network handles around 65,000 transactions per second. Meanwhile, the Bitcoin network can handle around 2,000.
Still, a good promise of Blockchain is its good security measures with a lot of room to improve. Although this might be shadowed by the success of its alternatives that secure transactions, track products, and facilitate recall while protecting privacy.
Not many business companies have the resources and time to replicate what the Visa Network does. That’s where centralized ledgers come as an option. This is a good alternative that is being offered by cloud services lately.
A good example of this is Amazon’s Quantum Ledger Database. This resource simplifies the process of implementing shared databases that are designed for ledger-like applications without the overhead of a distributed ledger blockchain.
This benefit promises immutability and verifiability, combining the ease and scalability of traditional cloud services. However, sometimes it is better to choose a blockchain instead of involving untrusted parties. Their biggest flaw is being prone to hacks and data breaches.
There are a lot of major database vendors, such as Microsoft or Oracle. They offer distributed databases used for data combination, replication, and duplication that ensure consistency and integrity.
Some open source projects have emerged recently, which support the creation of distributed peer-to-peer databases without the need to use traditional blockchains. Such mechanisms permit companies to develop decentralized applications that keep running when offline and sync up when nodes are online.
This method permits data sharing enforcing privacy and transparency when being used, making it very secure.
Blockchains are often promoted as one of the best ways to store data in a decentralized manner. But to do so, there’s a high cost that needs to be paid. Storing a megabyte of data is estimated to cost around $13k on the Ethereum network. Meanwhile, it costs just some cents on Amazon Simple Storage Services.
Many specialists also consider that cloud services are one of the greatest alternatives for business. The trust and security policies these services offer are often enough for any application. Also, they provide better governance and protection with much less overhead than a blockchain.
New peer-to-peer protocols such as IPFS have been emerging lately as very interesting approaches for storing data across the network. They have also been attracting a lot of interest from blockchain developers because their decentralized storage can be used for other applications.
While it is not certainly a blockchain, it is often referred to as one. IPFS also allows users to store webpages, content, and data reducing bandwidth requirements. This improves resilience and mitigates the issues related to censorship.
Other resources from the same protocol are able to encrypt files, split them into pieces, and distribute them globally through a network. These are completely compatible with Amazon S3 (Simple Storage Services) tools, which makes them extremely easy and friendly to use.
Best Distributed Ledger Technology Alternatives
There are many distributed ledgers that could be good alternatives to Blockchain. Some of the most renowned ones are Iota Tangle, Hashgraph, and R3 Corda. Both Iota and Hashgraph use alternative data structures to maintain the ledger known as DAGs (Directed Acyclic Graphs).
DAGs are very well known in the computer language world, representing the dependencies in applications for almost 30 years. Its main benefit is the allowance of writing data very quickly, but with a significantly longer time of wait to confirm it when compared to Blockchains.
Iota Tangle stores data across DAG in each node, representing a transaction. Created as an open source project, this resource allows a non-stop growing network through transactions rather than computer mining processes like Blockchain.
It also supports micropayments and other types of transactions through IoT devices. Since it is almost entirely decentralized, it requires a coordinator node to confirm new transactions.
Being another of the DAG ledger resources that could work as an alternative, Hashgraph also eliminates the need to mine for a bigger ledger. It’s based on a protocol called gossip, where the network nodes use it to share information and add new transactions to the DAG.
Developed to make it simpler to record and process financial transactions, R3 Corda uses a peer-to-peer model in which each peer stores data related to their transactions. In order to do so, it needs to re-create an audit trail that requires querying multiple nodes involved in a chain.
The system secures data about transactions by protecting the appropriate set of peers. One of the most notable differences between Corda and the beforehand mentioned ledgers is its simplified creation of smart contracts. This is vital since it’s a key application of Blockchain compared to DAG-based tech.
Are Blockchain Projects Still Viable?
While there are undoubtedly some features from blockchain projects that could improve and certainly will, it still offers resources that make them useful. For those that have currently decided to bet on these projects, there’s no reason to turn back and lose these benefits:
The industry is very complicated and often lacks transparency. Luckily, that’s the biggest feature a blockchain project can offer. Organizations can go completely decentralized without the need for any rule or authority, improving transparency.
Compared to some other methods and resources, blockchains chain a good sense of security in the Metaverse to their users. Any transaction that is done needs to be agreed upon by the consensus method, along with being encrypted and using hashing methods.
Although it is more expensive to store, blockchain users can benefit from the reduced costs it takes to associate with it compared to third-party vendors. Since it isn’t centralized, there are no vendor costs. Meanwhile, transaction interactions are also reduced.
While Blockchain systems are extremely useful, and their popularity has been rising non-stop lately, there’s still a lot of room to improve. This leads to competition, and there are a lot of systems and resources that can somehow emulate what this technology does and achieve a similar result.
This, of course, doesn’t mean that everyone needs to switch and forget about blockchains. It is still very secure and less costly than most of the other resources and offers many advantages.