Blockchain Technology, Distributed Ledger Technology


Improve your success by removing innovation and POC failure risks for Blockchain and emerging technologies. R&D and innovation experiences translated to business and technology considerations for selecting the right technology for a use case. This is part one of a two-part mini-series. Part one addresses business and general considerations, and part two addresses technology considerations. Both parts are independent of each other.


 Understanding the strengths of Blockchain and databases is important for applying the right technology to deliver business value. Business value concepts can be captured by developing use cases. And, conducting a POC (Proof of Concept) using the selected technology is a good way to determine the technology’s strengths before a full product is created and launched in the market.

 Many POCs fail to deliver value. One of the reasons for is that of not using the right technology which does not get used for several reasons like:

  • The excitement of using emerging technology like Blockchain.
  • Sticking to conventional technologies like database due to familiarity.
  • Ignoring Blockchain being unaware of its potential.

 This article is part one of a two-part mini-series. Part one addresses business and general considerations. Part two addresses technology considerations. Both are independent of each other.

 If you have not read part-I “Beyond the hype, Blockchain or Database – which one is right for you?” please read it. Based on my experiences in innovation, R&D and in launching emerging tech-based solutions, business considerations do get missed.

 And, companies pay a steep price for ignoring them. This includes loss of market share and loss of competitive edge. And at times, even a loss of significant market share. Therefore, I recommend that you read the first article. It will help you avoid the costly mistakes others have suffered from.

Part II – Technology Considerations

In Part I, I had discussed business considerations before technology selection. I had discussed developing use cases and testing its market applicability via a POC (Proof of Concept). And, I had discussed insuring that your company is ready to support you in developing and acquiring emerging tech resources.

 You are ready to select the right technology for your use case and POC. In reality, both may be required which is generally the case.

 Start by considering the key strengths of Blockchain and database technologies. Compare and contrast these strengths against your use case requirements. Soon, your teams and you will have a clear picture of which technology fits the role.

 I have provided a few strengths of these two as examples.

 Immutabilityvs Modifiability

 Unlike CRUD (Create, Read, Update, and Delete) functions in databases Blockchain has a “Write” and an “Add” functions only. A lack of “Update” or “Delete” provides immutability. Records once committed to the Blockchain cannot be changed or erased.

 In contrast, CRUD functions make databases modifiable. Records written to databases can be changed.

 If your use case requires frequent modifications to the data, or if your application logic changes frequently, a database is the clear winner.

 Is centralized control important vs. transparency & validation?

 Transparency and validation are strong considerations if your use case involves third party vendor partners who also need to verify and/or write their transactions to system. A Blockchain is better suited for this role.

 All the trading partners write to the same system. All the partners see the same version of the truth. This eliminates time spent reconciling records with partners. Cost savings are huge as companies spend a lot of time reconciling records and resolving conflicts arising from that.

 Due to immutability, audits become easy. Transaction history can be traced to the very first one in the chain. The benefits of a Blockchain solution is compelling in multi-party and paper (or process) intensive workflows.

 If your company needs to be in full control of the records, and data privacy is important, then centralized control is important to your solution. Your company controls the database, privacy and allows access to those who need to know. Database technology is the right choice in this case.

Will a data snapshot suffice or does the solution require data history?

If data’s journey since inception is important, Blockchain technology is a better choice. With Blockchain’s immutability, one can view the transaction history since its inception.

As an example, titles of homeownership changes can be recorded on a Blockchain. A land title company can view all the records on the Blockchain. Expensive land title searches can be eliminated.

If only a data snapshot can suffice, database technology is better suited for the role. Blockchain would be an overkill in this case. An example can be that of your one-time purchase paid in full at a grocery store.

Is performance important?

Blockchain, especially public Blockchains are notoriously slow. For example, Ethereum platform can only process approximately 15 transactions per second. Attempts are being made to increase its transaction speed.

In contrast, Visa can process thousands of transactions per second. Compared to a Blockchain, database reads, and writes are very fast. If the system performance is important, database technology is your answer.

Note that private Blockchains can process transactions much faster than public Blockchains. However, they are still no match to a database read/write speeds.

Security and infrastructure considerations 

If security, infrastructure costs, and immutability are more important, Blockchain is the clear winner. Multiple nodes controlled by others provide security on a public Blockchain. It is nearly impossible to bring down an entire peer to peer Blockchain network. Private Blockchains can accomplish similar results at reduced security due to a limited number of participating nodes.

A database controlled by a company has a single point of failure. Choose Blockchain if security and availability is a major consideration.

Other considerations

Several other factors impact choices between using Blockchain or database technologies. Examples include:

  • How would secured access be implemented?
  • Do participants need the same security level and access?
  • Is tiered or hierarchical security levels required?
  • Is a high fault-tolerant solution required?
  • Is scalability important?
  • Will public access be needed? E.g. view voting records on the system.

Answers to these impacts which technology gets selected.

Conclusion (for both part I and II)

Use Case concepts should be verified through a Proof of concept (POC). This is a good way to ensure that the concepts have real-world applicability.

 Emerging technologies like Blockchain, AI and IoT can provide significant business benefits not easily derived from conventional technologies. They should be used in POC, where applicable. To determine their feasibility, compare their use against conventional technologies for your use case.

Where emerging technologies are involved, a straightforward use case and its POC is a good option. This can help develop experience and confidence in the teams. They get prepared and excited about solving future complex use cases improving business value.

Careful planning and testing with technologies like Blockchain, AI, and IoT take time. But they pay handsomely through increased business value and improved operational efficiencies.

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