Five Blockchain Myths in EnterpriseIT
In the last few months, I have spoken to many IT leaders in large enterprises and found that there are many misconceptions about the Blockchain when we talk about Enterprise IT. I will try to debunk some of these myths in this article:
Myth #1: Blockchain is not environment-friendly
While most people know that Blockchain is not Bitcoin, very few know that the Enterprise Blockchain does not use the Proof-of-work consensus algorithm. This algorithm is the primary culprit for energy consumption in Bitcoin blockchain. Enterprise Blockchain platforms like Hyperledger or R3 Corda use pluggable consensus algorithms which are not energy-hungry programmes. There are many algorithms like Proof-of-Authority, Proof-of-stake, SBFT (Simplified Byzantine Fault Tolerance) and many more which are simple CPU/Energy friendly ways to implement consensus on the Blockchain.
Myth #2: Blockchain is only for Cryptocurrencies
While Cryptocurrencies are the highest number of use cases of Blockchain, but there are quite a lot use cases outside Crypto especially in Banking, Insurance, Manufacturing, Retail and Pharmaceutical industries. The technology has features like immutability and distributed-trust which makes it ideal for use cases across the industry especially where multiple parties are involved and need to share data in a trustless manner.
Myth#3: Blockchain cannot work with ERP systems
ERPs are the most critical systems in any enterprise and are carefully guarded systems and rightfully so. But that does not mean that new technology cannot work with these ERPs. Blockchain will sit on the edge of any ERP like any other system like CRM or Supply Chain. Blockchain provides the mechanism like JSON, RPC, API to integrate with any ERP, for that matter any system. The Blockchain is the most secure way to share data across the enterprise boundaries as ERPs does not have to be exposed outside enterprises own firewall when using Blockchain.
Myth#4: Blochain will need a very complex infrastructure
The fact is that Blockchain is one enterprise system which requires far simpler support than any other big IT system. Anyone participating in the Blockchain will need, at the most, a decent sized server to run the node inside their network and allow it to talk to the internet on a specific port. In some cases, you don’t even need to run that node. While backup of the node is always recommended, but even if the backup is lost, you still have a copy of the same chain with other participants in the network.
Myth#5: Who will drive the Blockchain adoption in their industry
This is more of a question than a myth. I frequently get a question that who, i.e. which organisation or business partner or consortium will drive the adoption in a particular industry. While this question cannot be fully answered in generic terms as every industry will have its drivers. But there are some common factors like regulatory compliance, a big player pushing its partners, large consortium adopting the platform, the advantage of being an early mover and the demand from consumer will drive the adoption.
In my experience, I have found that many of these questions are because of lack of knowledge about the technology within the IT leadership. While everyone is excited about the technology, they don’t know the clear steps to start on a project or a proof-of-concept in the Blockchain.
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