After we unraveled the way the technology behind blockchain works, it is time to learn how to assess if it is the right solution for a business. The hype around the crypto world is growing exponentially. After a few months of crowdsales, ICO surpassed VC investing. In a sea of projects with almost non-existing regulation, it is vital to be critical. Hence, to ask yourself the question: “Does this project have real use? Is it necessary to be on the blockchain?”.
Do you really need a blockchain for that?
A question worth asking. There are a few decision models that can facilitate your ruling.
The model focuses on the distributed ledger concept. It is useful when deciding on permissionless vs permissioned ledgers.
A notion in permissioned ledgers is that of an identity service. There is a range from full anonymity to full transparency, it’s not all black and white. Such service can give away certain information like occupation, age, location, but might withhold your name, gender and so on. It is used just to prove certain rights (drinking alcohol, services restricted to certain locations, etc), not to to give away the whole identity. The link between identity service (e.g.) and the permission blockchain makes it impossible for one entity to tamper anyone’s identity. Think of it as the equivalent of secure intranet.
This model introduces the differentiation between a public and a private blockchain.
This model is based on the assumption that the blockchain is useful where a market approach is needed. In other words, smart contracts can only handle simple business logic for now. Otherwise, alternative approaches should be used.
Blockchain is not a one size fits all solution. However, it is important to choose basics like visible or private network, centralised or decentralised your business is better off to be, etc.
Deciding if a project needs a blockchain is key to both investors and projects’ core team members. Not everything is meant to be decentralised, so think twice before investing in/creating the next SandCoin or some of its less obvious equivalents.
by Ana-Maria Yanakieva