The Fundamentals of Blockchain
Blockchain has amassed a massive fan following in recent years, especially due to the popularity of Bitcoin, which is based on the same technology. However, there is also a lot of noise & hype associated with it. Some proclaim that it will revolutionize the internet and usher in a new phase of decentralization while others say that it is nothing more than unsubstantiated tall claims. In this article, we shall filter the noise and help you assess the question “Should you and your organization invest in blockchain?” and “Is there a strategic business value in adopting blockchain?” For beginners, we present a simple explanation of blockchain: A distributed, decentralized digital ledger or database that keeps a permanent record of all transactions in a mathematically encrypted, chronological, and immutable manner. This is done by keeping sync over a network of computers where a copy of the ledger is maintained so that there is no single point of failure.
Is there a need for Blockchain?
One might wonder, do we need a technology such as Blockchain? Especially when everything seems to be working just fine with the rapid growth of Cloud computing, emerging AI & ML data management, and many more advances. Let us examine the emergence of blockchain:
Blockchain For All
Before we proceed further, we must understand that despite blockchain’s relative complexity, it is not something exclusive to deep tech companies led by engineers & scientists with cutting-edge technology. It can very well be implemented for any business which generates and/or processes data and applications – thus any organization under this spectrum qualify for utilizing Blockchain in their business. Blockchain can enable businesses to reap benefits including but not limited to a reduction in operation time, Data-immutability, Enhanced-security, Instant-traceability, and Automation. Many businesses, from global supply chains to financial services, across the globe, have already started investing in this technology to revolutionize their way of working.
Multiple challenges remain but can they be resolved?
Despite an undeniable consensus that Blockchain can help, there are challenges in adopting & implementing this technology as it is with almost all new developments. To holistically understand blockchain as a solution, let us understand these challenges and their probable resolutions:
Success and Failure
Now that we have understood the challenges in the adoption of blockchain as a solution, and the inherent resolutions to each of these challenges, let us examine some pioneers in the implementation of blockchain technology, those who have had successful outcomes and who did not.
The implementation of blockchain technology in various industries has shown both success and failure. BMW’s Partchain project improved supply chain transparency and efficiency, while Ripple revolutionized cross-border banking transactions. Estonia’s e-ID system provides secure digital services, while the failure of TradeLens highlights the importance of considering all obstacles before implementing a blockchain solution.
Should you employ Blockchain?
Now, after understanding the background of blockchain and the variety of use cases where blockchain has helped change how businesses’ function, let us weigh in on the primary question– should you invest in blockchain?
After having done a careful study of various case studies and real-world applications of blockchain, we have arrived at a structured approach that can be utilized by organizations to make an informed decision. The simple decision tree shall guide your thinking toward the answer: should you adopt blockchain to turbocharge growth in your company/solve specific problems that you have been facing or should you skip it and instead continue with your existing infrastructure?Simply follow the decision tree below and choose your answer based on your problem/solution requirement and arrive at the final level. It is important to note that ‘not taking an action’ is still an action since in some cases there is no viable benefit of blockchain adoption and looking at an alternative or sticking with the existing format is the best choice.
We must understand that blockchain is not a one-size-fits-all solution, & our well-structured approach can assist you to explore the relevance of blockchain and to determine if it is the right fit for your business. In conclusion, by considering the unique characteristics and requirements of your business, you can harness the full potential of blockchain and unlock new opportunities in the market. The time to act is now, and organizations that take the lead in adopting blockchain will have a competitive edge in the market.