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Is Blockchain the right tool for your business?

Publication Date: 26 Jun 2018 - By Tommy Jamet By Tommy Jamet
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FX & Rates Environmental, Social & Governance Multi Asset Cryptocurrencies Technology Financial Services

With the rise of cryptocurrencies, Blockchain technology has become one of the biggest buzzwords of 2017-18, opening the way to disrupt a vast panel of existing industry. This lead to a global race to who would come up with the best use case of the technology, in a way not dissimilar to the 'dotcom' era in the late 90's.

This excitement hasn’t emerged without reason, and while the disruptive potential of Blockchain technology might be even bigger than the internet itself, it is definitely not a 'silver-bullet' that will transform every business it touches into gold.

Before considering a blockchain pivot or implementation into their structure, a business should understand that Blockchain is first of all a decentralised, distributed and public digital database that is used to record immutable blocks of transactions across a network. 

In other words, if the solution you are looking at doesn’t require immutability, encryption (sensitive data) and has to be shared in a network that initially contained redundant information because they didn’t trust each other, most chances are that you would be better off using a traditional database and that at the end of the day, implementing blockchain will cost more money that it saves.

Let’s illustrate those points:

Immutability

A blockchain is a distributed ledger. That means that every node of a blockchain network will, at all times, hold a copy (partial or full depending on the nature of the node) of all the transactions that ever happened in the network. This way, transactions recorded on the ledger will remain there forever with no possibility to be deleted. 

If you are looking at Blockchain to record temporary data, you are therefore looking at the wrong technology

Encryption

Because Blockchain is a public database, anyone can access at any time to the entire ledger. Therefore, various encryption methods are used to ensure privacy remains intact. On the Bitcoin blockchain for example, you will be able to see all transactions that ever happen but the details of who paid who are encrypted.

One of the great advantages of blockchain is this possibility to encrypt sensitive data, and you might be looking at the wrong solution if the data you need on the network does not need encryption

A trust-less environment and redundancies

Blockchain allow for the first time in history to remove the need for trust the person you are transacting with. It is for example, a very effective technology if your business relies on a cluster of business to function where everyone keeps a separate ledger of all the transactions that they make into each other. Blockchain could here be used to remove all the redundant ledgers and create an immutable “one version of the truth”

These three points are essential when you are looking at Blockchain technology but there are many other applications for this technology, in the public sector for example on healthcare, supply chain, identity management, land registration, energy and many other. Blockchain is only a technology. How it impacts industries and society only depends on how well it will be understood and deployed.

 

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1-15 Clere Street, EC2A 4UY
London, United Kingdom

info@reachx.co
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