5. Name a good and a bad use case for blockchain, why

Determining Good and Bad Blockchain Use Cases¶

Identify the Need for Decentralization
Assess if the use case benefits from decentralization. Centralized solutions are often more efficient for tasks that don't require distributed trust or consensus.
Evaluate the Requirement for Transparency and Immutability
Consider if the use case demands transparent, immutable records. Blockchain excels where data integrity and audit trails are crucial.
Consider the Volume of Transactions
Determine the scalability needs. High-frequency transactions might be less suitable for blockchain due to potential latency and high costs.
Analyze the Need for Trust Among Participants
If trust is a significant issue among parties, blockchain could be beneficial. It reduces the need for intermediaries and fosters trust through its consensus mechanisms.
Assess the Regulatory Environment
Understand legal and compliance requirements. Some use cases might face regulatory challenges, especially in finance or data privacy.
Cost-Benefit Analysis
Compare the costs of a blockchain solution against its benefits and against non-blockchain alternatives. Efficiency, speed, and total expense are key considerations.

Why Good: Blockchain brings transparency, traceability, and security to supply chains. It allows for the immutable tracking of goods from production to delivery, enhancing trust among participants and reducing fraud.
Benefits: Real-time tracking, reduction in counterfeits, improved compliance, and more efficient recalls.

Why Bad: Blockchain networks, particularly those that prioritize security and decentralization (like Bitcoin or Ethereum), can't match the speed of traditional high-frequency trading systems. The latency and transaction costs are major drawbacks.
Challenges: Scalability issues, latency in transaction verification, and high operational costs make blockchain less suitable for this purpose.