When do you need blockchain? Decision models.
(Original post from Aug. 2016. One model added May 2017)
Let’s explore the decision models right away.
D. Birch Model
Ok this was a joke, but I like it. It is true that you don’t need blockchain per se, you need a solution to some problems that eventually could be a blockchain.
This is a good model that does not focus on the technology but on the distributed ledger concept, helpful to sort permissionless Vs permissioned ledgers out. Minor comment: it is not fully MECE because we could have a public network (“anyone can use”) maintained by a privileged group of validators (~Ripple), and private validators could be incentivized as well.
B. Suichies Model
This model introduces the differences between public and private. Corda is typically an inter-firm effort building an hybrid DL platform. Personally I think an intra-firm blockchain doesn’t make sense — if in the past you couldn’t solve the reconciliation of the data shared across your group, it means you have larger issues (IT architecture budget systematically cut, regulatory constraints, etc.)… probably a blockchain won’t help.
This model acknowledges that you need a “market” approach. But the step 2 should lead to “alternative approaches” as smart contracts can only manage simple business logic (lesson from The DAO). A strong need for privacy should also be dissuasive: do you want to share data or keep it private? Pick one.
A. Lewis model
Antony has an excellent blog on Bitcoin, Blockchain and Distributed Ledgers. I like the second question very much: “Could this have been fixed before blockchain?”. Blockchain is composed of existing pieces of technology (a bit of cryptography, a P2P consensus protocol and basic storage capabilities), so it is key to ask yourself why you couldn’t use these pieces of technology before.
Also, notice that at the end of the tree you might still try a normal database :-)
My model (as of Aug. 2016)
Well I thought about creating a smart tree to decide whether one needs a blockchain or not, but I ended up with a questionnaire :-)
If you have 10/10, congratulations you might be building the next Bitcoin or Ethereum system!
Now the less ‘ticks’ you have, the more trade-offs and customization you need and the less blockchain technology is relevant for your business issue. Probably below 7/10 blockchain technology doesn’t make sense — you might still try to build a shared ledger but don’t call it a blockchain.
Note: this model was defined in Aug. 2016 at the time the original post was published. As I add a new model today May 13th 2017 (see right below), I realize that the market has evolved and I would define my model slightly differently.
New model (may 2017)
Good model here except that “blockchain” is not defined and it comes a bit late because that we are already far beyond the public/private permissioned/permissionles debate :-)