Written by Nick Roquefort-Villeneuve, Head of Marketing — Ondiflo
I utterly love those Houston cocktail parties. They’re indeed full of surprises. Inside my Uber on the way to a private function last Saturday, I would have never imagined meeting Mexico’s top-concerts promoter and explaining to him how Blockchain technology can potentially streamline his operations, while eliminating those greedy middlemen. Yes, those intermediaries, who feed off the artists and revenue from ticket sales… So, I figured I’d share with you what I shared with him, while sipping a glass of delicious tequila.
Do’s Number One: Does Blockchain apply to your operations? There are questions that are always wise asking yourself, when thinking of leveraging Blockchain for your business. The first one is quite logical: Does my current system work just fine? If not, you can certainly wonder whether you oftentimes experience trust issues in your relationships with your trading partners. Also, can the middleman be eliminated? Can you conduct your business in a peer-to-peer mode? What limitations are you likely to encounter and can Blockchain bring an answer to those? Keep in mind that using Blockchain makes sense if the (centralized) technology you already have in place is slow, costly, and lacks transparency as well as reliability. Also, keep in mind that Blockchain is extremely demanding in terms of resources (developers, hardware, energy), so it’s not for everyone.
Do’s Number Two: Start from scratch or leverage an existing network? The reality behind creating a Blockchain network from scratch is the load of development that will be required to complete the project, including the creation of all the nodes and their entire configuration. Naturally, you’ll have to build whichever connections and user interface needed for the users and the admins. I am of course forgetting many steps here, but rest assured there are many, including those you don’t know yet and for which you’ll have to create solutions… from scratch.
Do’s Number Three: Private or public Blockchain? I am tempted to say that Blockchains geared towards B2C operations make more sense if they are public, whereas networks associated to B2B transactions are more likely to be private. In the case of my Mexican friend, whose operations at first glance seem to fit both a B2B (promoter, suppliers, artists) and a B2C (promoter, fans) ecosystem, what to choose? Does it make sense to have two Blockchain platforms? Should one ecosystem remain centralized? It’s not for me to bring a firm answer at this juncture.
Do’s Number Four: Will you need smart contracts? A yes or no answer will have an impact on the Blockchain platform you need to select. Will you require that certain processes run automatically? And will such level of automation contribute to the elimination of intermediaries that are an intrinsic part of your business transactions today? Said differently, smart contracts will allow you to get rid of third-parties, dramatically increase the speed of the process, and at a lower cost. If you indeed need to include smart contracts, then there are platforms like Ethereum, Tezos and Lisk, for example, that have built their reputation around this feature.
To Conclude: Does Blockchain Make Sense?
Remember that most Blockchain projects end up failing, because they are not required in the first place. The benefits this technology offers are undeniable however decentralization shouldn’t replace a centralized system that is efficient, that works. New is attractive. To that effect, it can be easy to get carried away and dismiss a reality by replacing it with the unknown. The unknown has a cost, and many businesses that thought had a valid use case ended up biting the dust. Blockchain doesn’t necessarily equate to success and profit, unless there is indeed a strong use case. And the latter is only the beginning.