Want to blockchainize your business? Take a look at the checklists in this article to decide if you actually need to build a new blockchain.
Blockchain can be seen as a ledger that records transactions, and its copy is stored all over the world. The multiple duplications of the ledger are such that any change done to one must be immediately done or confirmed by others. Thus the changes (or new transactions) are deemed legitimate.
The method of updating, making changes to, or confirming transactions on these ledgers scattered across the world may be through complex calculations (Proof of Work), staking methods (Proof of stake), etc. These methods are called consensus algorithms. Consensus algorithms are agreed on by the systems which stores ledgers.
Blockchain vs Cryptocurrency – The difference
Most times people mistake Cryptocurrency for Blockchain Techs. Cryptocurrency derives its name from Cryptography which is a method of sending encrypted or secret messages and Currency which are used in transactions to make Cryptographic Currency or Cryptocurrency as it is known today. Cryptocurrencies are encrypted messages, signatures, codes, agreements (smart contracts) that are sent between people using the blockchain which records, witnesses, and authorizes it in a way that it remains the same forever, unchanged. Cryptocurrency transactions recorded on the blockchain can only be changed or double-spent if all or 67% of all scattered recording systems (validators, or witnesses) can be convinced within a short period of time it takes to form a new block (a pack of recorded ledgers over a period of time, 10 minutes in Bitcoin’s case and lesser in others) – this is literally impossible.
After the creation of Bitcoin (which works on the Proof of Work consensus algorithm), Vitalik Buterin came up with a much simpler and viable solution called the Ethereum Blockchain. Ethereum allows applications which are formally centralized to build their solutions on the blockchain technology. This help many developers to build their applications on the blockchain thus having their own cryptocurrency (smart contracts).
Some of the decentralized applications built on Ethereum are Wunbit, IDEX, CryptoKitty, etc. After the creation of Ethereum, many other groundbreaking solutions have been created to make up for some perceived deficiencies in existing blockchain technologies and to develop new innovations which cannot be built on existing blockchains. Some examples are Directed Acyclic Graph (DAG) used in Byteball, Graphene Solutions used in EDC blockchains, Proof of Authority used in Vechain, and so on.
Creating a new blockchain or blockchainizing a product means to create a new blockchain technology or solution for an existing centralized product. There are a few existing examples:
- MB8coin is bringing its existing shop on the blockchain to serve as a payment solution and reward its customers for their patronage.
- Deloitte has introduced ‘Blockchain In A Box – BIAB’, a platform that helps organizations or companies considering to implement Blockchain applications to build their solutions in a sandbox. The platform is designed to provide intuitive, tangible blockchain demonstrations and experimentations.
“Deloitte has demonstrated the BIAB to several clients and to the broader blockchain and emerging technology community at multiple conferences, including Consensus 2019.” (Source)
- Aix, in partnership with XinFin, is building a blockchain implementation for the creation of Bonds and introducing it to its clients.
- Facebook wanted to lead a park of other companies to create a blockchain which can be used for payments (though it has faced a lot of criticism recently from politicians and it is uncertain if the vision will come to fruition).
- Governments of several countries are also planning to create Blockchain backed currencies to serve as national legal tender in their countries.
- Some other sectors are also being blockchainized with a view to putting an end to difficulties and inefficiencies. Solutions for the food chain and land registry(Xinfin) are being built on the blockchain.
These solutions are quite different from accepting cryptocurrencies as a mode of payment in an online business.
Considering Blockchainizing your Business?
Take a look at the checklists below to decide if they actually need to build a new blockchain.
Are there other similar solutions?
If there are other similar solutions, you can easily use those. For example, if you need the payment aspect of a blockchain, there are many cryptocurrencies you can accept as payment methods, even stable coins. You don’t really need to create a new cryptocurrency or build a new blockchain to accept payments, there are a lot of solutions out there to help you with this. Even if you need to create a new cryptocurrency, there are existing blockchains that can help you to create it without any technical know-how. The blockchain allows for competition. Although, a substitute will only thrive if it is presenting an innovation that is quite different from the approach of others.
A Blockchain or Cryptocurrency?
As explained above, there is quite a difference between blockchains and cryptocurrencies. Bringing your business online, you need to understand if you need to build a blockchain or simply create cryptocurrencies based on other existing blockchains. You need to study wide and research if there are existing blockchains that can accommodate your solutions or allow you to build your application on their foundation.
Only Locally Accessible?
Are your products accessible or useable outside your country or locality? Cryptocurrency helps break all boundary barriers and allows payments to be made instantly across borders. It may be out of place for a local restaurant, for example, to develop a blockchain just for its local customers. In that case, accepting cryptocurrency as one of its types of payments would be enough.
Creating a new blockchain technology is cost-intensive, needs a lot of technicalities and experience in the field. It makes a lot of sense to do thorough research before deciding if your business or product needs the blockchain technology or simply accepting cryptos as a means of payment will suffice.