Does your business need blockchain
Blockchain is at an inflection point, with momentum shifting from exploring double ledger technology to building practical business applications.
An enterprise survey conducted by Juniper Research found that nearly three-fifths of large corporations — those with over 20,000 employees — are either actively considering, or are in the process of, deploying blockchain technology.
With companies like IBM, Amazon and Cisco coming up with their own framework, and emergence of consortium’s like R3 and Hyperledger Project which have more than 300 members. This has certainly acquired attention of mainstream corporations.
But there’s also a lot of unnecessary hype surrounding this technology. This can be confusing, especially for new projects trying to decide whether or not it is advisable to implement blockchain.
So does your business really need a blockchain?
A paper from the department of computer science at Etihad zurich came up with the flow chart to determine whether a blockchain is a technical solution for a problem.
There are two types of Blockchain, Permissionless and permissioned.
• Bitcoin and Ethereum are instances of permissionless DLTs, which are open and decentralized. Any peer can join and leave the network as reader and writer at any time.
On the other hand,
• Hyperledger fabric is an example of permissioned blockchain where a central entity decides and attributes the rights to individual peers to participate in the read or write operations of the blockchain.
To determine which type of blockchain to use, start out by asking
Do you need to store state?
If no data needs to be stored, no database is required at all, & hence a blockchain is not required.
If you do need to store state, then you should ask,
Are multiple writers required?
Writers are network participants who have the ability to change the state of the DLT database.
If there is only one person or entity making changes to the database, then a DLT is not helpful.
But If there are multiple people, companies or entities that need to write to the same database, then you need ask the next question –
3) Can you use an always online trusted third party like an escrow service,
If yes & if you can as a verify it then you don’t need a Blockchain.
If there is no trusted third party or you want to eliminate paying large Transaction fees, then you need to ask –
4) Are all the writers to the database known?
If the set of writers, are not fixed and not known, then you should use a permissionless DLT.
If you know the set of writers to the database, then you need to ask –
5) Do you trust all the writers?
If you trust all the writers in your business network, then you don’t need DLT. A database with a shared write access works in this situation.
6) If writers don’t trust each other, then using a permissioned DLT makes sense.
7) If public verifiability is required, meaning anyone can read the contents of the chain, then a public permissioned DLT should be used.
So hopefully this flowchart will help you to take better business decisions and help you decide whether your business is a valid use case for DLT.
Feel free to reach out to us at EC Infosolutions so that we can guide you through your next Blockchain project.