#6 - Blockchain
Handling transactions requires trust. Banks, lawyers and other intermediaries provide a level of trust. But they also introduce friction and fees.
Blockchain allows unknown parties to do business directly with abundant trust.
Keep your cool. There's excess hype in the blockchain space. Blockchains remove the need for an intermediary and solve the Byzantine Agreement Problem. No more, no less.
Think about alternatives first. In most cases, a simpler database will be the correct choice.
Study the basics.
Removes middlemen. Everyone can see and verify the information regarding a transaction.
Increased transparency. Data is fully visible in the distributed ledgers.
Decentralized. No single point of failure. Data is replicated across the network.
Immutable and secure. At least in theory. Data written in the ledgers cannot be altered afterwards. It's hard (but not impossible) to get control of a blockchain network and interfere with the process.
High energy consumption. For Bitcoin alone, annual power consumption equals Chile. Annual carbon footprint equals New Zealand.
51% attacks. Gaining majority control of a blockchain network enables controlling all of the transactions. Which in turn compromises security.
Bad reputation. Lack of standards; cryptocurrencies are often associated with scams and hackers; blockchain has a relatively low amount of case studies with proven ROI.
Walmart reduced the time to track the origin of a product from 7 days to a few seconds.
TradeLens claims to reduce global trade friction worth of $1.8 trillion USD with their blockchain-based platform.
SCG reduced procurement processing time by 50% and costs by 70%.
we.trade simplifies and speeds up trade by eliminating fraud and trust issues.
Renault uses blockchain to track and certify compliance of vehicle components.
MediLedger reduces the time to verify returned drugs from 48 hours to a few seconds.
Blockchain will not reach larger adoption until 2030.
54% of leaders still think blockchain is overhyped. 88% believe that it's not a game-changer, but will get mainstream adoption at some point. 55% include it the top 5 strategic priorities.
101blockchains.com - Basic guides to blockchain
How Blockchain will redefine supply chain management - Stefan Gstettner argues why blockchain fits industries where high trust is required (healthcare, pharma, jewelry).
Assess carefully whether blockchain is what you really need. The odds are you need a more common database solution.
If blockchain really is relevant for you, try joining an existing network first before building custom solutions.
Blockchain is not mature enough to reach mass-adoption yet. Pilot projects exist in many industries, but use cases are niche and specific. ROI is often unclear.
Thanks for reading. See you next week!