Alternatives to Blockchain for Businesses are already gaining momentum.
Blockchain is gaining attention thanks to its enthusiasm for cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin. Enterprises are also looking at alternatives to blockchain for businesses to improve the transparency and data integrity of distributed transactions.
However, despite the promise, the adoption of blockchain has fallen behind the proof of concept. The main problem was the relatively slow performance of early blockchain technology. Early blockchain networks were limited to a few transactions per second and could take up to an hour to ensure transaction reliability.
Several blockchain alternatives have emerged that offer better performance. Organizations can also consider them to reduce costs, simplify development, and reduce integration issues.
Here are six main alternatives to blockchain for Businesses:
1. Centralized databases
One of the biggest concerns of traditional blockchain is scalability. By its very nature, decentralization increases the overhead of maintaining multiple copies of data and ensuring consistency. Blockchain also adds important computational requirements and energy consumption issues. While the blockchain community may be pleased with the decentralization of databases, maintaining a highly optimized recording system with a centralized database is of real value.
The implementation of new blockchains is getting better and better, but the performance is still poor compared to what is possible with a well-managed centralized database. For example, the Visa network (VisaNet) has a capacity of 65,000 transactions per second, while the Bitcoin network can only handle a few transactions per second. VisaNet currently processes an average of 2,000 transactions per second, so there’s plenty of room for growth.
2. Centralized ledgers
Few alternatives to blockchain for businesses have the resources to replicate VisaNet. Another option is a centralized ledger provided by your cloud provider.
For example, Amazon’s Quantum Ledger Database simplifies the process of implementing a shared database designed for applications like ledgers, providing a cryptographically verifiable audit trail without all the overhead of a distributed ledger or blockchain. This promises blockchain immutability and verifiability combined with the simplicity and scalability of traditional cloud services.
3. Distributed databases
Leading database vendors such as Oracle and Microsoft have long provided distributed databases that use a combination of data replication to ensure data integrity.
More recently, the open-source project OrbitDB has emerged to help create peer-to-peer distributed databases that work without traditional blockchain. This allows enterprises to develop decentralized applications that run when they are not connected to the Internet and synchronize with other database nodes when they are connected. You can also enable data sharing in ways that enhance privacy and provide transparency in how your data is used. OrbitDB is on top of a distributed file system and can continue to work if one node fails another blockchain-like function.
4. Cloud storage
Blockchain is sometimes advertised as a way to store data in a decentralized way. However, blockchain storage is expensive. One analysis estimates that it costs about $ 13,820 to store megabytes of data on the Ethereum network compared to Amazon’s Simple Storage Service (S3).
5. Decentralized storage
IPFS has emerged as a promising approach for storing data over peer-to-peer networks. It can decentralize storage that can be integrated with other applications. IPFS allows developers to store websites, content, and data in ways that reduce bandwidth requirements, improve resilience, and mitigate the effects of censorship.
Storj is another promising distributed storage technology that allows developers to encrypt files, split them into pieces, and then distribute them throughout the global cloud network. Directly compatible with Amazon S3 storage tools, cloud developers can easily learn applications without having to learn new tools.
6. Other distributed ledger technologies
distributed ledgers are the recommended blockchain alternative for trusted distributed applications. There is no particular need to create a distributed ledger from scratch and recommends using one of several options already available. Hashgraph, Iota Tangle, and R3 Corda are attractive alternatives to the distributed ledger blockchain.
Both Iota and Hashgraph use directed acyclic graphs (DAGs) as an alternative data structure for managing ledgers. DAGs have been widely used in computer languages for over 30 years to represent application dependencies and have nothing special to apply to transactions.
One of the main advantages of the DAG approach is that applications can write data quickly, but compared to transaction confirmation compared to private blockchains that require permissions to perform certain operations and It takes time. Applications need to be configured to notify users when conflicts occur, and protocols often have built-in rules to resolve these issues.