What makes a good blockchain use case?
Over the last two days, I have delivered blockchain-101 lectures to about 400 people. One of the predominant questions I get asked (beyond the use cases I provide by way of examples), is 'what makes a good use case for blockchain?'. Other forms the question has been posed in:
- My client is a small package delivery company that interfaces with a lot of larger players (like UPS, etc) but the EDI data that they receive when they provide last-mile connectivity is quite flawed and introduces delays / complexity. Can blockchain help?
- My client is a real estate company in Latin America, where there are some challenges in obtaining official stamp of approval from the government agencies when the land transfer happens. Is this a good use case for blockchain?
- My client is in the retail / distribution sector. Can they use blockchain to keep track of their supplies?
So what makes a good blockchain use case?
Identifying a blockchain use case is not easy. It is very tempting, at least for technology professionals, to use a new technology to solve every problem. Or in some cases, find problems to solve.
This is my recommended criteria:
- Find a business problem - Talk to your clients, or think through an existing client (or industry) where exists a genuine business problem which CANNOT be solved by other existing technologies. This is the first step in ensuring any technology, such as blockchain, is not being used as a hammer in search of a nail.
- Identify the network of participants - If criterion #1 is met, outline the network of participants, within the company or industry. The network could be various business units with a single organization, organizations within an industry, or across industries. Identify the asset(s) these participants are going to be exchanging on this network, and the transactions these participants are going to be doing. If you cannot do this, go back to step 1.
- Define the need for trust - For the business problem at hand, articulate the need for arriving at consensus (even though the participants are known or permissioned), and establish provenance of the asset(s) being transcated on the network.
If all three criteria are met, your use-case is a good application of blockchain.
1. do you really understand your problem? 2. will a distributed ledger help or hinder a solution?
Head of Kinexys Blockchain Platform Product & Services, AI for Tech
7 年Blockchain use case selection is more tricky and needs a bit more runway. Check out this post from my colleague Hari Subramanian. Its an holistic way to evaluate blockchain use cases that goes beyond the traditional exploration paths. https://www.bankingexchange.com/news-feed/item/6191-start-taming-the-blockchain?Itemid=101
Business, Technology & Product Strategy Executive | C-Suite & Board Advisor | Business Digital Transformation
7 年"Identifying a blockchain use case is not easy. It is very tempting, at least for technology professionals, to use a new technology to solve every problem. Or in some cases, find problems to solve." - so true Manav! we need to be able to answer what value-add are we providing (to the customer and organization) through blockchain that cannot already be provided in as good a way.
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7 年Very useful! Thanks for sharing Manav Gupta