A Simple Answer To The Complex Question: Do I Need Blockchain? No!


Having appeared from nowhere Blockchain has conquered the business market most rapidly. Besides the fast achievement of success, blockchains have another bonus – undoubted belief in their productivity. About 2 800 companies may be classified as the blockchain startups. On the other hand, we’ve noticed during our own practice that about one third of projects we get to estimate and to develop may as well do just fine without blockchain. We believe that people planning to develop blockchain-based solutions must be able to objectively evaluate the situation to avoid hyped up ‘shortcuts’ doomed to failure, as 92% of all blockchain-based projects eventually ‘burn out’ over time according to statistics. We also strive for the market to receive new, original products with unique goals.



How do we decide if the blockchain is excessive in a certain case? It’s really simple. A solution must deliver useful functionality above all and create the added value to interest consumers. If it is a strictly commercial thing that doesn’t really bring anything principally new to the niche, it can be built with alternative and even more efficient technology.

So, in this article we’ll try to get a closer look at all the hype around blockchain situation and make it clear for you when the technology is employed strictly for the PR purposes and when it’s used solely due to its extensive functionality.


Blockchain: Pros & Cons

Like any other, blockchain projects have their pros and cons. The comparison of which would be only fair for the objective estimation of blockchains.




  1. Trendiness. You might have heard the joke: ‘Let’s just call it a blockchain anyway, we’ll get funding’. We can’t ignore the fact that investors are more interested in blockchain-based projects than in any other contemporary solutions;


  3. Technology uniqueness. The blockchain technology is unique, being a completely original decentralized data storage conception. The decentralized nature is a principal requirement for many business solutions, as it helps guaranteeing authenticity and untouchability of personal user data;


  5. Target audience expansion. If your solution is really practical and useful, you can introduce it to the market without any special marketing effort and still get a new piece of interested audience: the term ‘blockchain-based’ alone will attract a bunch of new users.



  1. High cost. Blockchain solutions are expensive. Not only in the aspect of the implementation but also in terms of further maintenance (transactions in most blockchain platforms aren’t free of charge). Will your potential customers decide to use your particular solution? Or maybe they will turn to a cheaper alternative option?


  3. Moderate speed of transaction processing. If your software solution is expected to handle massive transaction flows – blockchain may not be your best option. Imagine that you come to a store to buy some groceries, paid with cryptocurrency, and were obliged to wait for an hour (!) until you’ve paid for your purchases. Think about it carefully: will this be okay for your particular audience of users?


  5. Unchangeable data issues. The main advantage of blockchain – non-customizable data – can sometimes become a real drawback when we talk about real business. If an error occurs in company’s smart contract during its execution it can lead to some undoable consequences such as funds sent in wrong direction, for example.


When Blockchain Works



Blockchain technology will come in handy in any type of arbitrage transactions with the involvement of virtual values – in CPA networks, for instance. The technology is also commonly employed in government register software – e.g. when a citizen wants to buy a car, they’re assured that all documentation is veritable by the decentralized system. Supply chains is yet another field of common blockchain usage. All in all, the technology is efficient when the guarantee of data untouchability is required.

A digital transparent ticketing ecosystem Guts, for instance, employs blockchain capabilities to eradicate the chances of ticket frauds and cases of the repeated ticket use.


When Blockchain Fails


Many people tend to have decided to employ blockchain particularly for the hype around it without really knowing its principal functionality. Before regarding any technology, it’s crucial to understand which problem you are looking to solve and how, as well as to have a detailed picture of your business model and the market introduction plan.



We just want to release tokens and sell then on the market’ is unlikely to work as a proper solution here. Such a product as tokens may simply not find the audience and fail while you’re going to waste a lot of time and money creating them. That’s why blockchain projects built exclusively around the hype of popular technological trends live on average 1,22 years.

A good example of developers successfully making it without the hyped up blockchain is the Tarsnap service. It requires $0,25/1GB for bandwidth plus $0,25/1GB monthly. As opposed to that, the BitCoin platform takes 1 satoshi for 1 byte. In such a manner, the first option is an obvious, huge saving opportunity.


What Are The Alternatives?


Each option has an alternative, at least in the world of web. For instance, the developers may turn to the Public key cryptography. This method will demand less effort and provide more profit as the result. Besides, one should remember that use of blockchain may result in the neglection of digital signatures’ functions. That is why startups should pay attention to this method of verifying documents, that happens to be more productive.



At the same time, the developers should consider other options of validation and do not make a choice based on the fashion trends. Developers should not underestimate backup services for storing data. More than that, DAG (hashgraph) the great alternative for the pre-ICO providing a cyclic processes.

An alternative, blockchain-free solution based on DAG is the IOTA project – ‘a next-generation technology designed from the ground up to be the data and value transfer layer for the Machine Economy’. A very perspective decentralized solution that looks to gain an extensive audience in the nearest future.


5 Questions to Ask Yourself to Figure Out Whether You Need Blockchain


Clarifying the following listed questions as to the nature of your project, its development and functionality principles, will help you make the most balanced decision as to whether to employ blockchain technologies or look for something faster and overall more rational for your particular case. In general, the reorganization of an existing properly functioning solution with centralized database access is quite a cumbersome idea. On the other hand, the decentralization with blockchain is an opportunity to guarantee transparency of all transactions to your users, which is especially relevant for deals where the software platform acts as an escrow. Thus, it may still worth it.



Additionally, according to the expert statements, shares of a large number of companies that successfully implemented blockchain technology into workflow started to increasingly grow in price. Where’s the ultimate truth? Here’s what we’ll tell you, try answering the following 5 questions and you’ll surely get closer to a reasonable decision for your particular case.


  • Do you need to store data & how many users does your app support? If the answer to the first question is “no”, then blockchains are an extra because it is their main function here – to store data. Their structures systemize the data. So you don’t need blockchain when there is nothing to systemize. Nevertheless, even if the answer to this question is “yes”, the blockchain may still be omitted if it is a single-user solution. The system would be an extra here because the list of actions provided by one person would already create the system. However, if there are multiple users, the developers still may do without blockchains, keeping in mind its difficult relationships with the updated GDPR policies.


  • Can you use an always online trusted third-party for storing data? Physically remote pieces of hardware are used to store encrypted data of blockchain-based solutions. The powers for that hardware are provided by the specialized companies (e.g. File Coin or Sia). Some of them take a commission per a transaction, others require a monthly fee. Nevertheless, one way or another, you’re going to be dependent on the success and stability of your provider’s business. If, at some point, they decide to cease providing resource rental services, you may risk losing your data. If you have confidence in your hardware capabilities provider, blockchain may be an option. Otherwise, consider an alternative solution.


  • Are all transaction parties trusted? It’s all a matter of your platform-performance priorities. Blockchain will give you a trusted third party to establish and support the sufficient level of trust between other parties of the deal. If your main priority is high performance, blockchain wouldn’t be the fastest option in the aspect of completing transactions and closing operations in general.


  • Is the speed of completing transactions crucial to you? Up to date, the most commonly used blockchain platform – Ethereum – doesn’t really provide a perfect speed of closing transactions. Perhaps, when the solution of the next generation – EOS – will be approved by a number of companies, this question will be solved; until then, however, you shouldn’t expect rapid blockchain performance.


  • Are you satisfied with your existing database, in general? This may sound obvious, but there’s no point to replace anything if you don’t really experience felt issues with your existing solution. Migration to blockchain is followed by quite an effort-intensive process of readaptation of your software to the decentralized conception.


And here’s a little extra for the brief summary:



Bottom Line


The trendiness of the technology in the market shouldn’t overshadow the set of functions featured by a solution, which must be your crucial point in choosing one. On one hand, the popularity of blockchain can help you expand target audience to some extent, and maybe even attract investors. On the other, you should keep in mind that there are always alternative options, which, alongside requiring less time and financial investments, can be much more sufficient for your particular case.



We’ll be honest, we love and excel at creating blockchain-based solutions. To stay transparent with our customers though, first, we offer a consultation as to alternative ways to implement certain functionality for your future project.

In any case, we have a very extensive experience in the creation of both blockchain-based and blockchain-free products of the highest quality – we’ll take good care of your idea!

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