Blockchain Technology! Just a buzzword, or do you really need it?
Blockchain technology has been a popular buzzword in the last 12–18 months. 2017 is often rated as the year of ICO’s by many people. Along with so much of the useful information, there is a lot noise on the internet as well, which makes it a challenge for anyone to absorb and comprehend what the technology is, and how an individual/company may use it to their benefit.
Finding precise information about the blockchain technology and its usefulness can be a challenge.
In simple words, blockchain technology is the new way to automate and manage exchange and transfer of data/asset between multiple parties, in a secure and trustworthy manner. The distinctive feature is that it does need a central authority to approve or track those transactions. It is designed in way to eliminate the need for interacting parties to know or trust each other at the time of making the transaction, hence it is called a “trustless” system.
Blockchain technology is the new way to automate and manage exchange and transfer of data/asset between multiple parties, in a secure and trustworthy manner.
Therefore, this technology aims to disrupt any business/industry, which relies on a central authority to confirm the transaction and participants’ authenticity. This, along with other efficiencies, has caused some major global companies to do further research and deploy it in their current business systems.
So how does one work out whether their new or existing business can benefit out of incorporating blockchain technology. The right answer could be different for every company, depending on the nature of their business and scale of operations.
However, below factors should be considered when evaluating blockchain (distributed ledger) technology for your business.
- Are there various interacting players in the business ecosystem? This could include business partners, suppliers, customers, competitors etc.
- Is there any centralized organization or registry, where all or most of the control lie?
- Are there any potential benefits for moving towards a decentralized ledger approach and common/shared database?
- Is there is a lack of trust between the interacting parties, or if the business processes are heavily relied on trust?
- Do the various interacting parties have conflicting interests?
- Is there a multi-party engagement in an end-to-end business transaction flow?
- Are there multiple databases kept and maintained by various players in the business ecosystem? Or, single database which is accessed by multiple parties.
- Is the communication between interacting parties encrypted, or it should be encrypted? This would help to provide security for data, maintains data integrity and privacy.
- Is there standard set of business rules, which govern the interactions participants in end-to-end business process flow?
- Are there tedious, manual verification checks involved in the end-to-end business flow?
If you have answered ‘Yes’ to most, or all of the questions above, it might be worthwhile to explore the suitability of Distributed Ledger Technology, and how it can increase efficiencies of your business, while reducing the time and costs.
Blockchain technology is revolutionary, but it will only add value if it is a right fit for you and your business.
I hope the above mentioned points will help to kick off the thinking process in the right direction.
To continue your learning journey about the Blockchain technology, its application and use cases in the real world, have a look at our Blockchain Associate training program.
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