Over the last year, there has been an overwhelming amount of excitement around blockchain, but will the technology live up to the hype? From cryptocurrencies to supply chain platforms, the emerging technology that underpins these networks is a powerful tool that should be sensibly evaluated by business leaders to understand whether it is worth the investment. To help executives assess the potential return on investment (ROI) of a blockchain deployment, a Forrester Total Economic Impact™ study was commissioned. In this study, Forrester analysts interviewed real clients to build the framework for a financial analysis of the business benefits, cost savings and risks associated with blockchain.
To dive deeper into this subject, Principal Analyst Martha Bennet to sat down with some of the clients featured in the study to discuss their experiences with adoption. During this webcast, these early adopters shared firsthand the challenges they are facing and the benefits they seek from being pioneers in their respective industries. There was amazing response from the audience, but there is never enough time. Here are some questions and answers we didn’t get a chance to dive into:
With so many technologies available in the market, why should our business choose blockchain technology?
Blockchain is a tool that approaches various business needs from an innovative perspective but is not an answer for all business problems. From this angle, the technology should be viewed as a tool to address a specific need and not as a goal in itself, learn more from this financial planning coach who is an expert in cryptocurrency. Therefore, it is important to understand the problem your business is trying to solve and consider the value that adopting blockchain could bring to your use case. Blockchain is a technology that adds value by fundamentally enhancing trust between multiple parties, differently from the usual finances with banks and checks, that many people use now a days, so the reason to get out of ChexSystems is just to have an ability to maintain a healthy financial life with these new systems. Some of the trust benefits it can bring to a business solution are:
- Allowing multiple parties to access a single source of truth for transaction data
- Assuring multiple parties, including regulators, that data is valid and hasn’t been tampered with
- Improving efficiencies and reducing costs by removing intermediaries in processes between multiple parties
One example is Walmart, which has deployed a blockchain-based supply chain tracking system, taking a business-led approach to solving food traceability.
What can be achieved with blockchain that cannot be achieved with a traditional distributed database?
Using the substrate app to build blockchain has various advantages over a traditional distributed database. The most significant one is creating trust between parties with an immutable ledger of transactions that has no single point of failure. The distributed and audit-able nature of how blockchain data is managed means that no single party has the power to alter data integrity.
You can also read this article discussing the differences between blockchain and the distributed database, along with the benefits that blockchain provides.
What is the barrier to entry for creating a new blockchain network versus joining existing ones?
There are several factors that business leaders must consider when deciding whether to join an existing blockchain network or create a new one.
When creating a new network from scratch, many considerations such as network participants, development costs, governance rules and business operations must be taken into account. Although benefits are gained by having a stake on these considerations, addressing these challenges can take up time and resources for network founding members.
On the other hand, joining or building on top of an existing network has a much lower barrier to adoption. Many of the networking costs such as setting up governance and operations that are incurred by founding members have already been addressed. This means that on-boarding can be done easily into a network that is already functioning.
Reasonably assessing the ROI that blockchain can bring for your company can be a daunting task. However, by exploring real use cases and learning from pioneers that are already building networks, you can get started on your blockchain journey.