The possibilities of a blockchain-infused future have excited the imaginations of business people, governments, political groups, and humanitarians across the world. Countries such as the UK, Singapore, and the United Arab Emirates see it as a way to cut cost, create new financial instruments, and keep clean records. They have active investments and initiatives exploring blockchain.
Blockchains have laid a foundation where the need for trust has been taken out of the equation. Where before asking for “trust” was a big deal, with blockchains it’s small. Also, the infrastructure that enforces the rule if that trust is broken can be lighter. Much of society is built on trust and enforcement of rules. The social and economic implications of blockchain applications can be emotionally and politically polarizing because blockchain will change how we structure value-based and socially based transactions.
Chapter 2
Picking a Blockchain
IN THIS CHAPTER
❯❯ Discovering the right blockchain for your needs
❯❯ Making a plan for your project
❯❯ Uncovering obstacles to your project
❯❯ Building a project road map
The blockchain industry is complex and growing in size and capabilities every day. When you understand the three core types of blockchains and their limitations, you’ll know what’s possible with this new technology.
This chapter is all about assessing blockchain technology and developing a project plan. It puts the following chapters about individual blockchain platforms and applications into context.
Here, you see how to assess the three different types of blockchain platforms, what’s being built on each type, and why. I give you a few tools that help you outline your project, predict obstacles, and overcome challenges.
There’s a lot of buzz surrounding blockchains and the cryptocurrencies that run them. Some of this buzz just stems from the fluctuation in the value of cryptocurrencies and the fear that blockchain technology will disrupt many industry and government functions. A lot of money has poured into research and development because stakeholders don’t want to be made obsolete and entrepreneurs want to explore new business models.
When it comes to finding an opportunity for blockchain technology to add value to an organization, often the question arises, “Where do blockchains add value and how are they different from existing technologies?”
Blockchains are a special type of database. They can be utilized anywhere you would use a normal database – but it may not make sense to go through the trouble and expense of using a blockchain when a normal database can do the job.
You really see value in using some form of a blockchain when you want to share information with parties you don’t fully truest, your data needs to be audited, or your data is at risk of being compromised internally or externally. None of these questions are simple, and the correct solutions can be difficult to ascertain.
This section helps narrow down your options.
Determining your needs
Blockchains come in a lot of flavors. You’ll find one that matches your needs – the trick is finding it! Mapping your needs to the best blockchain can be overwhelming. Whenever I have lots of options and often conflicting needs, I like to utilize a weighted decision matrix.
A weighted decision matrix is an excellent tool for evaluating the needs of a project and then mapping those needs to possible solutions. The key advantage of the matrix is to help you quantify and prioritize individual needs for your project and simplify decision making. Weighted decision matrixes also prevent you from becoming overwhelmed by individual criteria. If done properly, this tool allows you to converge on single idea that is compatible with all your goals.
To create a weighted decision matrix, follow these steps:
1. Brainstorm the key criteria or goals that your team needs to meet.
• Scale and volume
• Speed and latency
• Security and immutability
• Storage capacity and structural needs
Your team will have its own list of objects and priorities. These are just a few to consider while evaluating the correct platform to use to meet your needs.
2. Reduce the list of criteria to no more than ten items.
3. Create a table in Microsoft Excel or a similar program.
4. Enter the design criteria in the first column.
5. Assign a relative weight to each criterion based on how important that objective is to the success of the project.
Limit the number of points to 10 and distribute them between all your criteria – for example, 1 = low, 2 = medium, and 3 = high priority.
6. Add up the numbers for each objective and divide by the number of team members for a composite team weight.
7. Make any needed adjustment to weights to make sure each criteria are weighted correctly.
Congratulations! You now have a ranked list of criteria you need to meet to be successful with your blockchain project.
Defining your goal
You can easily get lost building a blockchain project that doesn’t have a clear goal or purpose. Take the time to understand where you and your team would like to go and what the final objective is. For example, a goal might be to trade an asset with a partner company with no intermediary. This is a big goal with many stakeholders.
Build back to a small project that is a minimal viable use case for the technology that clearly articulates added value or savings for your company. Along the same lines as the earlier example, a smaller goal would be to build a private network that can exchange value between trusted parties.
Then build on that value. The next win might be building an instrument that is tradable on your new platform. Each step should demonstrate a small win and value created.
There are three core types of blockchains: public networks like Bitcoin, permissioned networks such as Ripple, and private ones like Hijro.
Blockchains do a few straightforward things:
❯❯ They move value and trade value quickly and at a very low cost.
❯❯ They create nearly permanent data histories.
Blockchain technology also allows for a few less-straightforward solutions such as the ability to prove that you have a “thing” without revealing it to the other party. It is also possible to “prove the negative,” or prove what is missing within a dataset or system. This feature is particularly useful for auditing and proving compliance.
Table 2-1 lists common uses cases that are suited for each type of blockchain.
TABLE 2-1 Table Head
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