4 Tips for A Successful Blockchain Implementation
Written by Nick Roquefort-Villeneuve, Head of Marketing – Ondiflo
The upsides that Blockchain technology offers are undeniable. The solution we’ve built at Ondiflo is evidence of this. Blockchain technology means decentralization, immutability and security. All participants to a Blockchain network have access to the same data, which creates transparency and therefore trust. Moreover, Blockchain-based applications eliminate intermediaries, offering a true peer-to-peer transactional ecosystem.
Now, upsides are one thing. To implement a Blockchain network successfully is another. And success is certainly not a certainty. Current statistics irrevocably confirm that. Per Gartner, Blockchain should generate more than $3 trillion in business value by 2030, which infers that about 20 percent of global economic infrastructure could be running on blockchain-based systems by that time.
How to reconcile Gartner’s figure with the fact that only 2 percent of Blockchain projects go into production successfully? What follows could be a start.
Tip #1: Ask Yourself Whether Blockchain Makes Sense
Does the technology you currently have in place contribute to increasing revenue while minimizing expenses and maximizing relationships with your trading partners? If the answer is yes, reading the rest of this blog becomes optional. You don’t need to change anything. Just upgrade existing systems regularly in order to stay up to date technologically. To embrace a disruptive technology is one thing, to adopt a disruptive technology that ends up disrupting your operations and ultimately impact your bottom-line negatively is another.
Now, does Blockchain technology represent an opportunity to lower your costs while increasing speed and trust in crucial areas of your business processes? I am thinking more particularly about industries, where traceability is important and where a lack of traceability and visibility creates distrust with consequences that oftentimes include loss of business and market share. If this is the case, then (a private) Blockchain may be for you.
Tip #2: Develop a Potent Use Case
The concept lies in identifying a problematic that pertains to the way your business or an aspect of your business operates and finding ways of solving this challenge. So, to what issues are you currently confronted and how can Blockchain technology bring sustainable solutions? However, the focus shouldn’t solely be around the answers Blockchain can produce. It is indeed essential to consider other technologies as well in an effort to remain fully objective.
The business cases we developed for the oil and gas industry brought answers to a list of extremely precise questions that we identified beforehand, and that pertained to four main topics: Data, stakeholders, security and productivity. Among other steps, we organized many workshops with suppliers and operators to better understand their pain points and what prevented them from transacting seamlessly with one another and with much trust. For example, we were able to pinpoint an obvious lack of transparence in data that were leveraged to generate invoices, which created distrust on the payor’s side. As we continued to explore and diagnose all issues, it became obvious that a private or permissioned Blockchain platform was the appropriate solution.
Tip #3: Rally All Stakeholders Behind Your Blockchain Use Case
A Blockchain network without participants who are sold on your project is deemed to fail. In other words, to develop a Blockchain-based application and then go out there to sell it won’t cut it. This is the reason behind the fact that the 2 percent of Blockchain projects that have gone into production have mostly been built by organizations that partnered with each other, like IBM and Maersk, for example.
Why is that? To work closely with partners grants a unique opportunity to gather all those requirements that truly mater to them and build a solution that fully addresses such expectations. Furthermore, the participation to a Blockchain network is governed by rules by which all stakeholders must abide: How are the costs shared? Which entity validates a new data written to the Blockchain? What is the governance framework? Among other considerations…
Tip #4: Be Ready to Face the Unknown
To develop a Blockchain-based application isn’t a quiet river. The road towards production is fraught with major obstacles. The reason primarily lies in the fact that Blockchain is a new technology that certainly doesn’t have an answer to every problem. Security is one. It is indeed virtually impossible to compromise a Blockchain network, however prior to being written in the Blockchain network, a data that is pushed from an IoT cloud to a message bus, for example, is vulnerable. So, how should developers handle the problem?
Tip #3 is crucial, because participants get to voice requirements that are nonnegotiable. Each participant has authority over his own node and each data written in the Blockchain is stored in each node. Obviously, Supplier A doesn’t want Supplier B to know the financial details of his transactions with Operator A. Ondiflo developers had to build off-chain applications that would address this issue, while keeping the transparence benefit of the network intact.
Blockchain isn’t for everybody. This is not an elitist statement. It’s just a fact. To embrace Blockchain technology is a strategic technological choice like any other. It makes sense or it simply doesn’t. At least today…