Blockchain is fast becoming the new go-to-tool that promises to be the panacea for every problem. Everywhere I turn I’m seeing solutions popping up using blockchain to ‘solve’ a problem which has already been solved by regular web-tech.
For instance, I’ve read a number of whitepapers where companies are planning on using blockchain to track advertising. The rationale is often that it brings trust to a low trust environment.
This may be true, but the cost of running a distributed ledger to authenticate and store this data is far beyond what ad networks would consider to be reasonable. The volume of data stored is immense and aside from the fact that it would severely bloat the blockchain, the cost would be significant.
It’s a perfect case of using blockchain when a regular tracking solution would work just fine. It looks fantastic on the ICO, but if you critically consider that ad tracking data doesn’t need to be eternally stored and that by some estimates the cost of storing data on Ethereum works out to approximately 17,500 ETH/GB, or over $5Mil/GB the cost would be prohibitive.
When we started considering solutions for our CashBag.co product, we didn’t start with the premise that blockchain would solve it. We built our ecosystem using web server technology backed by robust databases and redundancy systems.
It’s only when we started investigating ways to improve our business, by adding immediate settlement of cash back rebates and giving our users the ability to instantly transfer their funds that we settled on blockchain as a solution.
In our instance, we wanted to create an ecosystem in which the consumer could get paid their rebates and instead of accruing towards a minimum threshold before getting paid. In some cases, this threshold could take months, or for infrequent users, years to reach.
By providing our users with a wallet that enables them to receive their rebates and cash back immediately, without high processing fees, we expect to significantly increase adoption and usage.
Developing a customer wallet and smart contracts to govern the transactions allows us to scale users exponentially, cut down on transaction processing costs and pass more value to our users, while assuring that the permanence of the transactions are maintained, through the blockchain.
A win-win solution if ever there was one and a good business case for blockchain.
(Article originally published on Medium -> https://goo.gl/LJDwMQ)