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davej

Blockchain

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Why is this said to be a critically important new technology?

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It's not an important new technology. It's the basis for cryptocurrencies. I'd actually label it a fad and I hope it dies quickly, the amount of energy used by people trying to exploit blockchains is alarming.

If you want a clear computer science perspective on block chains, watch this video:

 

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Well, I am aware of this, but I keep seeing claims that the "blockchain" itself is an important idea. For example it is claimed that IBM is working on 400+ different blockchain-based concepts. I think they are proposing that it can be useful for a variety of secure distributed/decentralized transactional systems.

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Yeah, that's what it would be good for - a decentralized transactional system.  Security may or may not be all that strong, but it does have verifiability.  Various cryptocurrencies are being exploited by people who can take over a majority of the network, but unless you have a bad actor like that it should work fairly well for that kind of thing.

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Managing a blockchain is very expensive. One of the fundamental properties of blockchain technology, proof of work, requires wasting a whole lot of energy just to calculate meaningless numbers. Finding hashes for each block is taking a lot of energy and the more blocks you add to the chain the more expensive it becomes to calculate new hashes, this energy is not free. Last year, the amount of energy used for bitcoin mining surpassed the entire energy usage of some small countries and bitcoin is not exactly mainstream. If blockchain technology becomes mainstream it is going to end up becoming too expensive to maintain. Blockchain transactions will end up costing more money than doing the same transactions through a centralized agency.

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Though it's a bit controversial,  such disruptive technologies rarely fit neatly into existing regulatory considerations, but I believe that the mechanics of the Blockchain are novel and highly disruptive.

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