How to decide if you “really” need Blockchain or Not?
Once someone learns Blockchain, they become biased towards the technology. Its not their fault, the technology is one hell of an invention and a beauty once you really understand how it works. Now people have started understanding that Blockchain is not just a technology that can make cryptocurrencies alone. Blockchain is applicable across industries.
But on the other hand, it also takes a lot of wisdom, experience, and in-depth knowledge of the technology to understand and accept that Blockchain cannot solve all the problems in the world.
It is important for a leader, entrepreneur, consultant, developer, manager, professor, etc. to be able to say NO to Blockchain when you do not really need it in your project/ process/ business, etc.
So how to know if Blockchain is needed or not?
Below is a flow diagram (referred from WEF and NITI Ayog) which helps you step by step analyse if you “really” need Blockchain or not in your project/ business etc. I will elaborate each step one by one
1. Are Multiple Parties Involved (more than 2)?
If your application or business has multiple stake holders involved (i.e. more than 2) or if there are different stake holders with different roles, then you can think of applying Blockchain in your network. If one 1 or 2 parties are involved then anyway there will be centralization in the network and you would not be able to use important properties of Blockchain.
For example: In a Supply Chain use case there are different stake holders like producer, transporter, distributors, retailer, etc. This type of business can use many properties of Blockchain like transparency, immutability, in-built trust in the network, etc.
If the answer to this question is NO, then you do not want to use Blockchain. But, if the answer is YES, then move to 2nd question.
2. Do you have Middlemen and want to remove them?
There are many businesses which have lot of unnecessary middlemen/ intermediaries. These parties are an overhead in terms of time and cost for any business. Ex: In International Trade Finance there are middlemen that do paper work for customs, some do packaging and handling to customs. These activities can be done by the business itself if the process is more streamlined and digital. Blockchain can help here and remove middlemen.
If the answer to this question is NO, then you may not want to use Blockchain. But, if the answer is YES, then move to 3rd question.
3. Working with Digital Assets instead of Physical assets?
Assets can be anything of value in the real world. For ex: a piece of land, diamonds, currency, chicken, a soda bottle, and the limit can be endless. In your project although you must be producing a physical version of these items or assets, but are you working with their digital versions for running business or are you directly dealing in physical assets?
Today many companies have transformed their business into digital assets i.e. dealing with items in their digital form.
If the answer to this question is NO, then you go to 4th question. But if your answer is YES, then you can jump directly to 5th question.
4. Can you couple digital and physical assets, with permanent and authenticated records of proof?
If your business has not already digitized assets, can you now do it? Are your assets such that they can be converted into digital form? It is important to use digital assets if you want to use Blockchain.
If the answer to this question is NO, then you do not want to use Blockchain. But, if the answer is YES, then move to 5th question.
5. Multiple parties require shared write access?
We discussed in 1st question that you do have multiple parties involved in your business/ project, and that is why you are still reading. So now the question is, do all these different actors of your application need write access to your application?
This means that, will more than one party in the network make some changes in the system or change the state of the system? For ex: If a physical asset is transferred from one party to another in a supply chain, this also needs to be reflected on the digital version of the asset on Blockchain and for the each of those parties will need write access.
If the answer to this question is NO, then you do not want to use Blockchain. But, if the answer is YES, then move to 6th question.
6. Required to store non-transactional data?
Blockchain is a transactional database i.e. Blockchain is made to store transactional data and not heavy file like images, videos, or other type of heavy files. In cases when heavy files or other than transactional data is also involved in a project, then Blockchain can be used in conjunction with other traditional databases like MySQL, Oracle, MongoDB, etc. But, Blockchain itself alone is currently not the best technology for such a requirement.
If the answer to this question is YES, then you may not want to use Blockchain. But, if the answer is NO, then move to 7th question.
7. Require high performance (Transactions per second)?
If you need a very high transactions per second capability in your projects then Blockchain is not for you as of now. One of the biggest limitations of Blockchain currently is its throughput of transactions per second (TPS) capability. If you are expecting TPS for your application in 100k or more than you may not want to use Blockchain.
Although there are many new developments happening in Blockchain to improve that and maybe in future Blockchain will be able to handle such requests as well.
If the answer to this question is YES, then you may not want to use Blockchain. But, if the answer is NO, then move to 8th question.
8. Do you need ability to control functionality?
Now if you are on this question, then your project/ business has a high chance of utilizing properties Blockchain for its benefits. Now the question is of whether you need Public Blockchain or Private Blockchain in your application.
- If you need separate permissions to be given to different parties in the network i.e. you need Rights and Access management.
- If you want to control onboarding or deboarding of parties.
- If you want additional privacy within parties.
If you need all these features in your application then you will need Private Blockchain for your application. Private Blockchain platform options are: Hyperledger Fabric, R3’s Corda, JP Morgan’s Quorum, MultiChain, etc.
But if the answer to this question is NO, the you move to 9th question.
9. Should transactions be Private?
The transactions that your project will have, do you want them to be Public and accessible for any random party? If YES, then you can use Public Blockchains like Bitcoin, Ethereum, EOS, etc. as platforms for your applications. Example can be a crown funding application would require more and more parties to look at applications and have read access over transactions, such an application can use Ethereum Blockchain.
But if you want Private transactions then you would want to go for Private Blockchains as described in previous points.
So, these are some steps to determine if you need Blockchain in your application or not. Of course, these are not the only things which can decisively tell you to or not to implement Blockchain. These are general questions you need to ask before opting for Blockchain.
You yourself should also understand Blockchain in detail if you are an Entrepreneur, a Leader, a Manager, a Consultant, a Professional, or a Professors who is looking for application of Blockchain in their work area.
BlockDigest is one company that is focused on training and educating people on Blockchain. Apart from classroom trainings, they have a variety of Blockchain courses on their website:
https://blockdigest.thinkific.com/
There are several courses to choose from like:
Blockchain for Leaders — If you are an Entrepreneur, a Leader, a Manager, a Consultant, a Professional, or a Professor looking for application of Blockchain in their work area, can help you understand Blockchain in detail with real-world Blockchain implementation
Certified Blockchain Professional — Take you from Zero to Fluent in Blockchain.
Certified Ethereum Smart Contract Developer — Learn Blockchain and develop an end-to-end Smart Contract based application (dApp).
