Steve Fei
October 2017.

Is blockchain basically a more sophisticated form of a double-entry bookkeeping method?

2 answers

In a way. But double-entry bookkeeping is specific to recording numeric transactions. It’s used in currencies, it’s used for debt and loans. But a blockchain is much more generic - I can use a blockchain to store images, I can use a blockchain to store video files, I can use blockchain as a cloud storage provider. It would be much less likely that your files would be lost if you used blockchain as a storage provider, because it’s distributed. So blockchain can be used as a sophisticated form of double bookkeeping, but it’s a lot broader and more generic than that.

Yes, and I think that’s a nice way of putting it, at least for accountants!

I generally introduce blockchain to newcomers as a type of database; it is a technology that allows you to organise data - in bitcoin’s case, ‘blocks’, or chunks of transactions, linked together in a cryptographically secured ledger.

Is blockchain the appropriate database for all situations? Absolutely not. It’s a more inefficient database in many ways because of its distributed nature. You may not always need the decentralization and replication that you get with a blockchain versus a traditional database system. There are fewer people who know how to develop blockchain software and applications, and fewer systems that can interact with a blockchain database than with a traditional distributed or centralized database.

So it’s not necessarily a solution that makes sense in many cases, and I think that’s what a lot of businesses that have started to go down the blockchain rabbit hole over these past two years have come to realize. Many executives are now saying “wait a minute, blockchain doesn’t really fit our needs”.

Garrick Hileman and Michel Rauchs released the 2017 Global Blockchain Benchmarking Study, which can be downloaded as a PDF here:
You can read the brief summary of their study here:
The above interview was conducted on 12 December, 2017.