Blockchain for Business beyond cryptocurrency
From the speech done at the Mobile World Congress, in February 2019 in Barcelona.
An 18-minute speech, to introduce what is Enterprise Blockchain and its challenges to a non-technical audience.
- What’s blockchain
- Different types of blockchains
- Current status of the technology
- Business Impact
Our second speaker is Laura Spinaci, she’s going to give us a, a vendor-agnostic overview of what is the business impact of blockchain, and what are the current implementations. So give a warm welcome to Laura Spinaci, please.
Hi, I’m really excited to be here. For me is the first time that I got an invitation to a women-only event, usually, I always begin surrounded by guys so really happy to be invited.
It was challenging to find the topic that I can explain and squeeze in 15 min, also because I didn’t know the level of understanding of the audience; hope to provide value.
I picked up and choose the topics that are probably more difficult to find online, especially in terms of the implementation and approach of the organizations in front of blockchain
- What is blockchain?
Blockchain and cryptocurrency are two different things. Blockchain is the technology that goes beyond Bitcoin and cryptocurrencies. Blockchain is a combination of several technologies and concepts that came to life in 1990. It is an append-only digital ledger of records or logs of transactions.
2. Different type of blockchains
In the last 1 year and a half, lots of blockchains came to light, some of them have a completely different technology stack and data structure between each other. We call them blockchains, but in reality, it is possible that some of them are other types of technologies.
The main difference within blockchains is public versus private. For sure there are other granularities that differentiate the blockchains, but let’s stick to the main two categories and attributes for the moment. Public blockchains vs private blockchains define who can read from the network, such as the visibility of the transactions inside the blockchain. In a public blockchain, I can download a node of Bitcoin or Ethereum network, see the transactions, validate them, and write them into the network. Of course, this is not the type of context where a multinational wants to operate because in a business environment the agreements between the stakeholders usually remain private between the parties involved that are not keen to make them public. For this reason, private blockchains are also called permissioned, since the parties that can access and write into the network need to be somehow a member of the network, which is not permissionless publicly open to everyone, like Bitcoin and Ethreum. Between the two extremes, open and private, there is a spectrum of different flavors of blockchains.
For example, there are blockchains that are permissionless & permissioned, They are open since everyone can read, and at the same time permissioned, where only a selected group, specific entities, can write. This type of configuration, for example, makes sense when a University issue a certification of your degree and your new job employer want to verify it. Only the University, as the entity that has physically issued your degree, can write, permissioned, but everyone can see or verify that you got a degree.
I hope that is clear that different use cases need different solutions. It is quite common hearing questions like “does this blockchain fits this industry or project?” but in reality is quite complicated to identify which is the right one right off the bat. One of the aspects to take into account is also the integration with the existing infrastructure and legacy platforms. Without a detailed analysis, it is not possible to determine where to use what.
3. Status of the technology
Before this general question, we should ask our self in which country? There are countries where the status of the technology is more advanced, like Asia and the US. Others like Spain and Italy for example, the technology is a bit behind. There are also some types of industries that are more agile by nature and are able to absorb changes and new technologies faster than others. Generally speaking, the early adopter's industries of blockchain has been fin-tech, healthcare, and supply chain, followed by digital identity and IoT, to name a few.
What are the challenges an organization is forced to face during the blockchain journey?
- Identify the right use case. The first challenge is to define which are the issues that they want to address with blockchain. Starting from their status quo towards the definition of the blockchain network.
- Architecture. The poor technical experience on this new technology makes challenging to handle the compatibility issues with all the other peace of existing technologies. Set up of the architecture and deployment of the blockchain, (in which cloud solution or on-premises in local services), it is something that we all the organizations are learning by doing.
- Organizations need to define upfront governance rules in order to handle the implementation and maintenance of blockchain. It is a new business context where who participates to the network have to aim to common gains and share at least part of business processes.
- Network monetization. Due to the lack of maturity of this technology, the ROI is usually based on assumptions, eather for permissionless than permissioned. Understanding the monetization is monetization strategy is
a essential exercise to figure out the longevity of the blockchain network
- Like other enterprise’s new technologies, it is a matter of change management and risk assessments. Obviously, in projects that are experimental, the risks are higher.
- Companies need to consider also the development stage of the different type of blockchain in the market. Some of them are more advanced others haven’t been tested yet, and are not ready to be plugged in and used.
- Different blockchains perform better for specific capabilities rather than others. For example for business transactions where privacy is mandatory, using public blockchain is way more challenging than private or permissioned that had been built by default to preserve privacy.
- Scalability & Performance. There are blockchains that perform better than others although is still not possible to do accurate analysis about scalability and performance since there aren’t so many blockchains in production and consequently, enough operations data to analyze.
- Interconnectivity between networks. Blockchain technology is a network of networks. Right now there are different networks, different blockchains. For sure many of them won’t survive, but there will be more than one blockchain. How these blockchains will communicate with each other is still under construction.
- Global regulations. We arrived at a point in history where blockchain or not, businesses are global. Blockchain enhances the globalization since is a network of network technology, but regulations are mostly local. A network that aims to share business goals between nodes that are spread in different countries, or continents, is subject to the local jurisdiction. How regulations cross the border will work it is still under construction.
- Network effect: blockchain is a network technology and needs to be easy and agile to onboard and offboard. It is also crucial to keep strong incentives in order to maintain a high interest to participate in the blockchain consortium.
5. Business Impact
Which is the value that blockchain brings to the table? Again, there are some use cases that fit better rather than others.
In a context of enterprise’s new technology, did never exist a tool that can satisfy the needs of every business use case, same for blockchain technology. Dispute resolution means that blockchain allows data structure that when some fault takes place it is easier to restrive the information need to find out what happened. Now it is really complicated within an internal platform and almost impossible to trace back the communication between
Auditing it is much easier since one of the main capability of blockchain is to be temper proof. Data can’t be modified, blockchain it is a write-only ledger and the transparency of the transactions make the auditing process smoother.
Data Integrity. One of the most frequent causes of database issue is a human fault. With blockchain, the data are validated through cryptography and verified plus the fact that data can’t be changed, extremely reduce the chances of data corruptions.
Connect with me:
My website blockchainmentoringlab.com
My email Laura@blockchainmentoringlab.com
on Linkedin https://www.linkedin.com/in/lauraspinaci/
on Twitter @lallispinaci
on Meetup Hyperledger Barcelona: https://www.meetup.com/it-IT/Hyperledger-Barcelona/
on Meetup University of Nicosia Barcelona Chapter: https://www.meetup.com/Decentralized-Barcelona-Chapter/