What is Blockchain Technology?
There is a need for complete, secure, authentic and trustworthy information exchange across various fields. A Blockchain technology is a distributed ledger that stores information securely across multiple systems to enable transactions between 2 parties. Blockchain Technology is a digitized, decentralized, public ledger of all cryptocurrency transactions. The transactions done using Blockchain technology are immutable, they cannot be deleted.
Blockchain technology is emerging as a tool around the world to redefine the framework under which information can be used for transactional purposes. Blockchain technology can revolutionize any kind of transactions and will impact every sector – Public Sector, banking, power, education, healthcare, etc.
Benefits of Blockchain Technology
- Shared ledger – It is a distributed system shared across the business network, which makes the system robust & resilient by eliminating a failure.
- Consensus – Transaction happens only when all parties agree to a network verified transaction.
- Provenance – The entire history of an asset is stored and available whenever required.
- Immutability – All information is trustworthy and records cannot be tampered.
- Finality – Transactions cannot be reverted once completed over a Blockchain.
- Lower transaction costs – Blockchain technology is less costly due to low transaction fees.
Factors to be considered for Blockchain Implementation
Blockchain is not the solution for all problems that arise during data and asset transaction. It cannot be implemented in all the cases. One must understand blockchain technology, its features and identify cases where this solution can be useful.
- Multiple parties share data – The multiple parties involved should have a common view of the information available at hand.
- Multiple parties update data – An Organization can consider Blockchain Technology when actions undertaken by multiple parties needs to be recorded and the data coming from multiple parties needs to be updated.
- Requirement for verification – Participants should have faith, conviction and trust that the actions that are recorded are valid. Blockchain Technology can be implemented when it is important to build trust amongst parties and make them understand that their actions recorded are valid.
- Intermediaries add and increase complexity – Blockchain Technology can be considered when the transaction is dependent on multiple intermediary party and their presence increases the cost and complexity of the transaction. Removal of dependency on intermediaries can reduce cost and complexity.
- Interactions are time sensitive – It reduces delay in taking actions hence has a business benefit.
- Transactions interact – Transactions done by different participants or multiple parties interact with each other.
Inspira Enterprise – The Global IT Solutions Provider with its center of Excellence in Networking, Unified Communication, Cloud, Security, Blockchain, Healthcare & Smart City solutions, recommend below Blockchain fit assessment framework before an organization decides to implement Blockchain technology.
Blockchain Fit Assessment framework
There are a few factors like time sensitivity of data, cost of reconciliation, need for data security, and requirement for authentication should be considered before determining whether blockchain technology is a feasible solution or not and its implementation.
- Data Security – Data privacy, Data sharing, API or centralized
- Authentication – Paper-based authentication, Document validation
- Technical Maturity & Scalability – Workflow management, Scalability, Landscape maturity, Ease of integration
- Manual Processing – High reconciliation cost, Manual reporting, Manual operations
- Intermediary – High intermediary fees, High latency, Lack of trust
- Transparency – Multiple participants involved, Transparency to all
- Information Storage – Multiple storage required, Data consistency
- Trust – Trust among participants, Multiple writers to transactions, Risk of fraudulent transactions
- Time Sensitivity – Real-time or synchronous transactions