Breaking Blockchain — A Framework to Evaluate Blockchain Use Cases

How to identify a true blockchain use case with 11 questions

[This full article is published on hackernoon]

The reality behind the hype

I was born in a medium-sized city in Northern China named Harbin, a place that is mostly famous for two things: beer (the first beer brewery in China was founded here) and ice sculpture. Cutting edge technology is rather remote to the city of Harbin. Dad was a retired businessman who spent most of his life in the hospitality business sector. In one of my recent visits home, dad asked what I have been busy with lately and I told him that I had been busy with something called “Blockchain”. His answer shocked me, “I know what that is”. When my old man told me that even he knows blockchain, then I knew for sure that there is huge hype about blockchain. The only question that popped to my mind was, just how big is this hype around “blockchain” or “distributed ledger” technology?

Gartner gives a pretty impressive answer as it forecasts that the business value of blockchain will reach $360 billion by 2026, surging to $3.1 trillion by 2030. People and businesses jump right into the craze of blockchain with the mindset that it is the “new Internet”, investing on an ICO and rolling out a blockchain solution without understanding the fundamental problem that blockchain is solving (refer to “The Age of Trust — The Problem Blockchain Solves that Others Cannot”).

In the MERL Tech 2018 conference in Washington, DC, three MERL practitioners documented 43 blockchain use cases through Internet searches, most of which were described with glowing claims like “operational costs… reduced up to 90%”.

“However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development.”

I consider most of these use cases to be funded by startups, so maybe that won’t count.

What about in the corporate world?

Having worked with a wide spectrum of multi-national companies, I view the so-called “Blockchain projects” to be more driven by the FOMO (fear of missing out) factor instead of by compelling use cases which are structurally evaluated. I often hear claims such as “We already implemented blockchain in our system” (most of which are “Proof of concept” projects). I then ask for what the use case behind their blockchain project is and find out most of the use cases did not need to apply blockchain solutions. So, what happens to some of these projects? They got launched, the company got the headline, then people went back to the legacy system as they were much easier, user-friendly and cheaper to use and maintain. According to CNBC, “84% Of Companies Are Dabbling In Blockchain”. To be fair, blockchain is still at its early stage; most of companies are discovering and experimenting around blockchain with the aim of proving the viability of its use in their businesses. Refer to the figure below.

The purpose of this article is to show you how to structurally evaluate blockchain ideas, pick up the real use case and apply the right type of solution.

The blockchain use case evaluation framework (2019)

To assist you in evaluating blockchain and identifying the right use case, I developed a blockchain use case evaluation framework I call the “Chili Sauce Blockchain Evaluation Framework”.

To read more, please refer to the full article published on hackernoon below