From autonomous vehicles to artificial intelligence, there is an abundance of new technology that is being adopted around the world. When it comes to blockchain, many businesses have been quick to embrace the technology, but, as warned by the US National Institute of Standards and Technology, “there is hype around the use of blockchain technology, yet the technology is not well understood”.
Although many star-ups and small businesses are turning to blockchain to innovate their products and services, Amazon Web Services has now become the latest industry giant to embrace the technology, following the likes of Microsoft Azure. After taking blockchain into consideration and speaking to its customers, AWS has revealed and released two blockchain products into the market.
With many businesses getting carried away with the hype of new technology, it’s important to stop and think before jumping in head first. So, what should organisations around the world consider before they buy into blockchain?
Business blockchain consideration #1: Database vs blockchain
Although blockchain has a variety of benefits, there are also some flaws that need to be taken into consideration. Organisations should define the risks and responsibility of the blockchain system, and contemplate whether the organisation is best suited to blockchain. Things to consider include:
- Whether the organisation needs a shared common database
- The level of trust between all relevant parties (blockchain is specifically useful for those with little rapport or trust)
- Whether data will be inputted into the database at various times along the process
Ultimately, organisations need to ask themselves if blockchain will bring genuine benefits to their organisation and their customers, or whether a simple database will suffice. Although it can be tempting, there’s no use in embracing blockchain for the sake of it.
Business blockchain consideration #2: The confidentially conundrum
Blockchain is a powerful tool, but when it comes to confidentially, open blockchain is not always the right fit. Blockchain is typically a public database, which creates trust between contributing parties. So, if the business processes involve sharing confidential data that shouldn’t be seen by the outside eye, organisations should instead turn to private blockchain.
For example, users can turn to certain blockchain solutions that allow for private transactions and channels. These channels have similar features to public blockchain, but exclude transparency from the equation. Businesses are likely most interested in private blockchains, where there is no need for trust. However, shared ledgers are crucial for the optimisation of processes, which help to reduce costs.
Although blockchain can be secured through ‘techniques including encryption and data protection’ or knowing its hash, public blockchain should not necessarily be used to share confidential files unless the business can ensure that it’s 100% secure.
Business blockchain consideration #3: Customer care
With blockchain being relatively new technology, user adoption can be limited when it comes to general consumers. Embracing technology can take time and cost a lot of money, so it’s important for the business to know whether their customers will reap genuine benefits from blockchain.
By speaking to customers and consumers, the business will be able to determine whether blockchain will receive widespread adoption, or whether it will become a novelty that is quickly forgotten. With blockchain being a complex piece of technology, some users will initially be deterred. However, if blockchain will bring benefits to both the business and the consumer, the organisation should seriously consider adoption.
Although some might be cynical, with careful consideration and weighing of benefits vs risk, blockchain can be a well-received addition to an organisation. With a level-head and the ability to consider whether blockchain is a ‘nice to have’ or ‘need to have’, organisations can embrace only the technology that is right for them, and avoid the infamous hype.