Blockchain Solutions
The blockchain was designed to support Bitcoin (a cryptocurrency) based transactions in a secure manner, using a decentralized ledger and cryptographic mechanism via public and private keys. Even though it was originally designed to support Bitcoins, the underlying framework and cryptographic mechanism are suitable for numerous other applications.
What this means for your organization?
Blockchain provides an elegant framework for creating and managing distributed digital ledgers. It shows tremendous promise for addressing transparency and data security and privacy challenges that we face today, but shouldn't be considered a panacea. Many companies are exploring blockchain technology for building blockchain-based solutions. The financial services industry was a natural fit, given blockchain's initial focus on cryptocurrency transactions. Currency transfer, cash settlement systems, peer-to-peer payments, anti-money laundering (AML) and know your customer (KYC) are some examples. Other verticals such as insurance, healthcare, public sector, media, telecommunications, travel and hospitality, and energy will see emerging use cases and solutions implemented using blockchain technology. There are over 70 types of blockchains in the market today and these blockchains will have to be integrated with each other - to operate seamlessly.
Companies that wish to pursue it, must understand that the technology is maturing and there are some critical operational challenges to overcome. Developing a narrowly scoped proof-of-concept (POC) implementation is recommended as a first step, followed by an in-depth review of the tactical and strategic business needs. A more robust production implementation should consider the lessons learned from the POC, industry best practices, the current state of the blockchain ecosystem and emerging trends, as well as an appreciation of the fact that one may have to transition to a different ecosystem in the future (which will have a cost and resource implication).
BLOCKCHAIN SERVICES
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Blockchain Use Cases/Business Case
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Blockchain Strategy
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Blockchain Proof-of-Concepts
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Blockchain Architecture
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Blockchain Technology Selection
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Integration Strategy
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Blockchain Training - Business and Technology
What are organizations currently doing?
Many companies are exploring blockchain's potential by piloting it and developing prototypes or proof of concept applications, while a small minority (mainly in the financial services domain) have deployed it in production. The US government has indicated its support for blockchain and is encouraging federal agencies to use it. In August 2017, the U.S. Department of Homeland Security, Science and Technology Directorate, unveiled a list of 13 small businesses working towards “the development of new cybersecurity technology.” The companies are part of the 2016 Small Business Innovation Research program. Each was awarded approximately $100,000 in funding, for a total of $1.3 million, and four are using blockchains in their product.
Some Blockchain Implementation Considerations
Blockchain introduced some major paradigm shifts - crypto-economics, cryptocurrency, independent transaction validation, and a decentralized ledger with no central authority. While this technology shows tremendous promise, the blockchain ecosystem is still maturing. Here are some implementation considerations:
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Scalability/Throughput - Extreme levels of scalability and elasticity will be key in coping with unforeseen transactions peaks, as well as the computationally heavy hashing and cryptography algorithms essential to any blockchain implementation. The heavy hashing and cryptographic algorithms that are inherent to blockchain design introduce significant processing and transaction overhead and pose challenges with respect to scalability and transaction throughput. For example, Etherium which is a popular blockchain fabric provides a throughput of 15 to 25 transactions per second, which is inadequate for most business applications. Several vendors such as Chromaway (Postchain) and Microsoft (Coco Framework) are addressing these challenges. Chromaway (an AlyData partner) has developed Postchain, the consortium database, which combines the power and flexibility of mature database systems with the secure collaboration and disruptive potential of blockchain. It represents the convergent future of enterprise blockchain and database technology.
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Vendor Lock-in - Another major issue is that companies could be locked-in to their blockchain vendor. The cost of transferring blockchain-based records to another organization would be exceptionally high, so a business could find themselves trapped with a vendor.
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Interoperability - With production deployments on the horizon, operational considerations will take center stage - particularly the interoperability of emerging blockchain implementations with existing core systems. In addition, the compatibility between multiple versions of a distributed ledger will become crucial.
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Governance - Since blockchain operations are typically consensus-based, one way to address it is to implement a strong governance model across the network participants. Governance rules such as who can get on the blockchain, what they can do, how do they communicate, who can see what, and how are smart contracts are validated, can be programmed into smart contracts.
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Digital Ecosystem - Blockchains only work with digital records. Therefore, organizations that wish to use it will have to digitize paper documents first.
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Primitive Data Architecture - Blockchains offer a very primitive data architecture, especially compared with mature database systems that offer a sophisticated set of features for accessing, manipulating, and analyzing data that have been refined over many years of development.