Blockchain is an emerging technology, and not a magic wand. This article aims to help you understand the technology at a high level, as is required before asking questions like “Should we be using blockchain in our organisation?”. The answer is almost certainly no.

What’s a blockchain?

Blockchain technology has been around since 2009. It's only recently that businesses are trying to understand it.

Blockchains are databases that are duplicated across many servers, or nodes as they are known in blockchain parlance. Writing data to a blockchain is outsourced to miners or stake holders. Once agreed, that new data is synced to all nodes. This process is decentralised, as anyone can become a miner, and/or a node. Data stored on a blockchain is practically invincible due to the complete duplication of the same data across all nodes. A complete copy of the entire blockchain is stored on any computer that joins the network as a node. For data loss to occur, every node would need to be destroyed.

Within a blockchain, groups of records are stored as blocks. The blocks are cryptographically linked to their neighbours in the chain. Hopefully the name blockchain now makes sense. This linking enables quick detection and exclusion of data irregularities. Once records have been written, they are not deleted or updated.

Let’s unpack this.


Blockchains are often referred to as being decentralised and distributed. This means no form of central control. “A complete copy of the entire blockchain is stored on any computer that joins the network as a node.” In conventional blockchains, anyone can download software to have their computer join the blockchain as a node. Once they do this, the entire blockchain is copied to their local machine. They could be anywhere in the world, or even in space.

Unprecedented legal challenges

Blockchains are highly redundant, immutable, public databases. This represents a privacy and legal debate that most people, let alone organisations haven’t yet considered. Anything saved to a blockchain is publicly available, potentially for the rest of time - and there is nothing you or I can do about it.

In Europe we have GDPR legislation which states that organisations must “ensure that the personal data are not kept longer than necessary”1 and the right to be forgotten which states a person can demand “the erasure of links to data which the data subject regards as prejudicial to him or her”2.

If all data is stored forever on the blockchain, and the blockchain is distributed across the entire planet, we have a legal compliance issue; it prevents any one entity changing the existing data records. This feels very much like the irresistible force paradox "What happens when an unstoppable force meets an immovable object?" In this case it will be invincible blockchain hitting immovable legislation. One thing is for sure, both will need to change.


If you are careful not to store any personally identifiable information on the block chain, then the next consideration is scalability.

A blockchain stores all data forever. If this data growth outpaces increasing hard drive storage capacities, then your blockchain of choice, may in future run into disk space problems on it’s nodes. With growing size, we also need to consider sync issues, the length of time it takes to introduce a new node and download a full copy of the blockchain from other nodes. Finally, on a very busy blockchain, simply keeping up with the transactions has caused unacceptable delays on writing your data to the blockchain.

These problems have not yet been solved and are a risk for your project and organisation should you choose to use blockchain before it is ready.


To create a perfect storm of scalability and cost problems, some businesses have started creating their own blockchains. I simply ask, why?

Your business doesn't need to build a blockchain. This follows the same troubled logic as building or managing your own serverless infrastructure when you hear how good AWS is. This will create a huge development cost, a huge ongoing ops cost and blockchain isn't even your product. Lastly, your business plan surely doesn't include competing with Ethereum?

Industry developments

In 2009 bitcoin was released. It was the first crypto currency, the first public blockchain and an insurance policy against a failing banking system.

In 2015 Ethereum was released. The first programmable blockchain, this reduced the barrier to entry for business into the blockchain era. Anyone can now to easily create their own tokens on top of the ethereum blockchain, benefiting from it's size, ongoing development and widespread adoption.

In 2016 Storj 1.0 and Sia 1.0 were released. These two teams are building the first serious attempts at data storage via blockchain.

Caveats / FAQ:

This article is not FUD. This article is here to try and illuminate the risks of blockchain technology to C-level execs, and warn them it’s not ready yet. I strongly believe in the technology, I just don’t believe it’s out of alpha.

This article is not about cryptocurrency, it’s about blockchain technology and considerations for applying it to a project.

Full vs Partial nodes. I have only covered full nodes in this article, because they are the most relevant to the challenges faced by organisations and the future scaling challenges of blockchain technology.



© 2018 Craig Mayhew