Where blockchain works best

For the most impact, bring together multiple mistrusting parties and cut out intermediaries, says Troy Norcross at Blockchain Rookies

---

Share

Troy Norcross

---

The key to finding the best use cases for blockchain is to look beyond your enterprise. Blockchain adds the most value when the network allows for multiple parties to come together and agree to utilize a single source of truth of core information. The trick is not technology. The trick is to find alignment across multiple stakeholders within an industry and then to identify the incentives to make the project happen. The technology of blockchain and distributed ledger technology (DLT) is the easy part. Business transactions today typically involve one or more third parties acting as brokers or intermediaries to provide trust where it may not exist. These third parties include banks, brokers and dealers. They add value by connecting various parties in a transaction. They also add cost and delays. In some cases, these intermediaries can be the source of errors and even fraud. Blockchain networks offer the environment for trust to exist without the existence of a third-party brokering the relationship. This trust comes from the fact that all parties can see all information related to transactions in which they are participating. Blockchain also provides the ability to automate business logic between parties with smart contracts reducing conflict and improving the liquidity of a supply chain. The challenge with blockchain and DLT today is that there are limitations of speed and performance that do not apply to traditional database systems. Many enterprise leaders and IT departments are sceptical when they cannot see a reason to use a conventional database. If your project is internal and does not involve any external participants, then you may not benefit from blockchain. If you are looking to streamline your supply chain or similar network, but your enterprise is still the primary beneficiary and will control the network, it is again likely that you use a conventional system. If you have multiple parties working together where many of them are competitors, including competitors to your enterprise, this is the basis for thinking about how blockchain could add value. The best blockchain use cases solve industry problems for multiple enterprises. The best opportunities involve various distrusting parties where no single enterprise is the sole beneficiary nor sole controller of the network. ▪ The full article by Troy Norcross on managing great blockchain projects appears in ‘Growing with Blockchain: From disruptive potential to operational reality’, published by Novaro, June 2020. See details here.