Do blockchains provide any improvement over conventional systems/frameworks when decentralization is not required?

Question

I generally understand the blockchain framework. I have spent much time learning about how it, potentially alone, is able to provide for a decentralized system. For TRUE/ABSOLUTE decentralization, it is effectively required. This much I understand.

What I do not understand is what benefit they provide over conventional systems when decentralization is not truly being implemented. Ie, if a COMPANY (therefore not decentralized) wanted to make a product or system that did XYZ, what benefits does blockchain provide over conventional frameworks? Speed, efficiency, size, scalability, etc...? From my understanding blockchains would be decidedly worse at each of these than a 'legacy'/existing system, so, outside of hype, why would a company choose to develop a product with this as the framework?

The only thing I can think of is speed for settlement. If everyone has a copy of all transactions, it's immediately clear when something settles.
**I am making the caveat here that True Decentralization basically only exists in the internet and bitcoin. Effectively nothing else is actually, fundamentally decentralized.

Answer 1

a COMPANY (therefore not decentralized) wanted to make a product or system that did XYZ, what benefits does blockchain provide over conventional frameworks?

In many cases, nothing whatsoever. And a ton of drawbacks. Blockchain remains a solution looking for a problem.

Answer 2

Blockchain is specifically designed to enable a reliable peer-to-peer system of bookkeeping, so of course it provides no benefit if the system is not truly decentralised.

Its inefficiencies are so great that it is said to be using more energy to operate than the entire consumption of some whole nations.

It has primarily attracted interest for ideological reasons, similar to certain interpretations of object-oriented programming.

It conforms to the ideals of a liberal-democratic mentality, in which individuals interact by entering into binding agreements - the agreement in the case of blockchain being about who has money in their wallet.

Economically, it is perceived to have similar properties to precious-metal currencies, but without having to store the metal (since possession of the metal is proof of who has the money) or lug it from one party to another to execute a transaction.

And similar to any hard currency in circulation, its value is based on the weight of popular confidence, and transactions are not subject to direct oversight by others who are not party to the transaction, thus allowing transactions that occur for illegitimate or illegal purposes to be concealed.

But crucially, unlike hard currencies, it is not the record of the transaction that is concealed - in blockchain systems that has to be public - but the parties to the transaction, and their purpose. That is because the only link to a physical individual, is their possession of the key required to redistribute funds within the system.

In this aspect, it more resembles a confidential banking system where accounts exist only as numbers, with no information stored about the account holder - similar to what the Swiss used to operate. Unlike a banking system, there is no bank-house where all the records are kept, and which can have its shutters pulled down by the law (cancelling the operation of the system and neutralising any balances held), or where the law can station themselves to impose new requirements for account-holders to show identification or prove the legitimacy of the holdings in the account as a condition of access to them (which is what has actually happened to the Swiss banking system).

The international nature of the system also means that it crosses the borders of jurisdictions, and if local lawmakers attempt to attack the system, then balances can be quickly cashed out elsewhere, or the individuals who possess those balances can discreetly flee to places where the balance remains accessible and enforcement less strict.

All that said, there is no application of blockchain that I'm aware of, where it is the most efficient way to achieve a lawful purpose. Its wild inefficiencies are tolerated as the price of banking system that maintains the secrecy of the users' identities, and resilience against the force of the law to disrupt its use.

The hype that has been created to induce more users to use the system globally, and its emergence as a popular gambling platform, is part of the strategy of its primary users to create noise in the system to conceal illegitimate transactions, and (perhaps even more importantly) to create the popular circulation and weight of confidence that allows its internal balances to continue to be easily exchanged for goods and services anywhere in the world.

Probably also, the number of users with money vested in the system - and who are not using the system for any illegitimate purpose (assuming gambling is not illegitimate) - also creates a political lobby who have an economic self-interest in its continued maintenance and widespread accessibility.

It is in this last point that you can see that a blockchain system does not just have requirements in terms of technical design, or comparatively vast energy use for any processing done. It has requirements in terms of creating a large volume of users who actually have a strong economic self-interest in continued participation in and maintenance of the book-keeping system that supports the aims of the illegitimate users.

Answer 3

what benefits does blockchain provide over conventional frameworks? Speed, efficiency, size, scalability, etc...? From my understanding blockchains would be decidedly worse at each of these than a 'legacy'/existing system

It somewhat depends on the system but for proof-of-work, it's slower because each transaction requires 'mining' which really means randomly generating values until you find one that meets the criteria e.g. starts with the right number zeros. It's as if whenever you cashed a check there were 1000s of people in the branch playing slots machines until one wins enough to cash your check. There's no way that doing all this extra work is going to make things faster. This is where the wastefulness of the system happens. Only one result of all the miners' calculations will be used in this race to win the prize. All the other attempts to find the answer will never be incorporated into the chain and the no value can be unrecoverable from the work that went into them except perhaps using the waste heat somehow.

Not sure what you mean by 'size' here but scalability is low because there's an immense amount of redundancy and because of the process described above takes time. The nature of a (proper) blockchain is sequential i.e. each block depends on the prior being verified before it can be processed. This is why things like 'lightning' (which is not blockchain) are needed to allow for scaling bitcoin to usable levels.

If everyone has a copy of all transactions, it's immediately clear when something settles.

That assumes there's no one building a second, longer chain. I read an interesting article that can't find right now that explained that there's a misconception that after a certain amount of blocks are written, there's almost no chance that a prior transaction can be rewritten. In reality, someone with enough computing power could build a second chain for quite a long time and rewrite the 'accepted' chain only at some point in the future. In theory a nation state could be doing it right now.

The main thing that blockchain technology provides (assuming all the necessary conditions are in place) that is somewhat unique is the ability to create an 'indelible' record that no one entity can modify unilaterally. Whether that's always a good thing is in question. For example, see the controversy over McDonald's new McRib NFT.

Answer 4

You have to be clear on what's covered by "blockchain". To some extent, any series of blocks containing a cryptographic authentication of the previous blocks could count. In which case git is a blockchain.

However, usually people refer to the use of a proof-of-waste system like Bitcoin has, in which case the answer is that it does not have any advantages unless you need to withstand adversarial nodes ("Byzantine generals"). If you don't need that, you can replace proof-of-waste with regular cryptographic signing. This is sometimes called "permissioned blockchain".

The only thing I can think of is speed for settlement. If everyone has a copy of all transactions, it's immediately clear when something settles.

This is not at all solved by Bitcoin-style systems: it's possible, although rare, for two different miners to emit valid blocks at the same time which will only eventually have one chain abandoned and one declared canonical. See various discussions on "how many confirmations to wait for".