A lot of people have recently become very excited about various imagined applications of The Blockchain, which is what underlies Bitcoin.
The blockchain, in simple words, is a distributed database where nobody adding to it trusts anyone else, but they do, as a whole, trust the collective group of everyone contributing to it.
Something these people are missing is that the blockchain is interesting precisely because of this trust model. The trust model is what makes it able to handle situations that couldn't be handled by a traditional database or even a git repository.
You don't need a blockchain if:
- You don't need a database, or
- Nobody but you needs to write to the database, or
- You trust everyone else who needs to write to the database, or
- Everyone who needs to write to the database all trust one or more people who can write to the database
The blockchain becomes useful when you have a large number of people who need to write to a database and any one user doesn't trust at least one of the other users.
But there's another important component: Your blockchain is useless if you are accepting entries from untrusted users without verifying them, and verification takes time and resources. Bitcoin motivates people to donate their resources because it's tied to a currency so people get some monetary value out of it.
It is difficult to see how smaller and more private blockchains could work while still retaining the properties that makes a blockchain special. Once you strip away those properties, what you have is more like a git repository where you have a chain of transactions which can be verified cryptographically to be in the correct sequence.