What’s Better? Cloud Computing Or The Blockchain?

A lot of people are excited about all the new doors that are being opened due to the advances in cloud computing and storage. Now, computers don’t have to do all of the heavy lifting when it comes to data storage and operating bulky software.

Yet, not so much attention is being given to the blockchain that does many of the same things and with added security and speed. Nothing is black and white, of course, so there can be a case made for either one being the better choice depending on the circumstances.

Cloud computing vs Blockchain

In this article, I will compare the two different systems so you can see the differences and the pros and cons for each yourself.

How does the blockchain work?

Most people are really only aware of the blockchain when they are searching online for the most secure bitcoin wallet or to read about predictions for when to invest. The inner workings remain a mystery for most.

Bitcoin was able to take the world by storm precisely because of the technology of the blockchain. On it, are numerous transactions that happen all the time. Each transaction is recorded in a hash or node and has to be verified and encrypted. This requires quite a bit of computing power.

But, rather than use a server, it relies on powerful computers that all have the blockchain hosted on it. Essentially the blockchain is a community of servers.

Once each transaction is verified and encrypted, it cannot be altered due to the fact that there is no one server. This is how it is able to produce a currency and why the computing ability is so powerful.

How does the cloud work?

There is a meme out there that is as funny as it is accurate. “The cloud is just somebody else’s computer!”

Well, it isn’t somebody’s computer, but it is just a server. A powerful server, however.

An everyday computer would never be able to match the computing power or immense storage capabilities of the cloud. Since it is on a server that is powerful enough to handle a lot of complex processes, it is very popular with businesses large and small.

Downsides of the blockchain

So far the biggest downside to the blockchain is that it is difficult to scale up. The blockchain is called a chain because if you could see a physical representation of it, it literally would look linear as a chain would. So one block can’t be registered until the one before it is finished so it can build on it. This limits scalability as it can only process so fast.

There is also the issue of cost. To create a hash, or block, there needs to be a lot of computations being done. Which means that the computers being used must be powerful. When you have potentially millions of computers doing these computations, then this uses a lot of energy for the servers.

For instance, the Bitcoin blockchain uses more energy than the entire country of Switzerland. As electricity rates rise, so does the cost to use the blockchain.

Interoperability is another hurdle that has to be figured out. As of right now, two blockchains can’t work together. This means that if you have a supply chain on one blockchain, then everybody along the way needs to be on the same blockchain. This is much different than the regular internet that has no such limitations or segmentation.

Should you switch to the blockchain?

One of the biggest problems with the cloud is how vulnerable it is. When a bank or ecommerce store uses the cloud for its storage of sensitive information about its users and clients, there is a risk that it can be breached.

The blockchain is far more secure as there is no one server. If your business deals with storage of personal and financial information then this is a good selling point for your potential customers.

If you need to do a lot of processing and need it quickly then the cloud is probably going to be better for you. Since transactions need to be verified before another block can be created, it can take some time for computing to be completed. This could be solved in the near future, however.

The best bet is to use a hybrid system. The blockchain for data storage and financial transactions and the cloud for your computing needs is a good way to go.

As the technology advances, and many of the scalability issues are ironed on, then the blockchain may be able to take over the entire system and make cloud computing obsolete. You don’t want your company to be late to the party so adopting blockchain where it makes sense and using the cloud for other aspects is a smart move.