Not all digital transformation projects require blockchain, and applying it to the wrong use case can create added complexity. So, how do you determine the suitability of blockchain? Our Product Marketing Lead, Soelene Justus, shares the key considerations of this process and how our blockchain advisory service supports organisations with implementation.
Before determining if blockchain is suitable for your project, it’s important to understand how it can transform your business workflows.
- Timestamping: This is one of the most straightforward applications of blockchain. Timestamping leverages the immutability of blockchain to provide verifiable proof of data existence at a specific point in time. It’s useful for digital notarisation, legal evidence, and auditing project workflows.
- Tokenisation: This involves representing physical or digital assets as tokens on the blockchain. Tokenisation allows for fractional ownership, more efficient transfer and tracking, and greater liquidity for otherwise illiquid assets by providing access to global markets around the clock.
- Programmability: This feature allows for the automation of processes and execution of conditional logic on a blockchain. Smart contracts enable agreements without the need for unnecessary intermediaries. Programmability improves efficiency in digital transactions, automates supply chains (including delivery versus payment), and facilitates dynamic workflows between entities (for example, automated insurance payouts, real estate transactions, and digital credential verification).
What questions should you be asking?
The potential of blockchain technology presents both opportunities and challenges. This is why we recommend asking questions at every stage of implementation – across a number of scenarios:
Understanding the basics: can you be successful with your blockchain implementation if you are operating within an ecosystem in which you don’t understand the language or rules?
Weighing up the risks: every blockchain comes with its own risk model and governance structure, what happens if the unknown variables influence your risk parameters?
Considering liability: if you are inviting clients to join a network, have you developed a comprehensive onboarding process and are you clear on who is liable for potential failures?
Building resilience: protecting the network requires implementing security controls, are you familiar with what this entails and are you aware of any points of failure?
Outlining your specific requirements
Selecting the right blockchain use case is not a one-size-fits-all process. With a myriad of options available, you must consider the nuances of each blockchain and how they align with your specific objectives and use cases.
At Quant, we recommend creating a multistage process to outline specific requirements related to the properties of the blockchain. This process includes:
- Determining the requirements for a recommended technology type.
- Shortlisting recommended DLT or DLT network options.
- Assessing the grading criteria to identify which elements are essential for the use case.
- Analysing the shortlisted DLT or DLT networks according to the selected grading criteria.
- Identifying the most suitable network.
Unlocking the benefits of blockchain
Seeking guidance from blockchain experts can unlock several key benefits:
- Enhanced security: A blockchain audit helps identify and address security weaknesses, strengthening the system against cyber threats. By resolving vulnerabilities, you can prevent breaches that could harm your brand.
- Risk reduction: Identifying and addressing potential risks can decrease the likelihood of security breaches, financial losses, and reputational damage.
- Compliance with industry standards: Conducting an audit can ensure that the blockchain system complies with the latest regulations and industry standards, reassuring clients and partners of your commitment to quality and resilience.
- Optimising existing resources: Securing your organisation’s IT infrastructure by optimising workflows, automating routine tasks, and reducing operational bottlenecks.
Is it adding value?
Blockchain has the potential to transform workflows, but successful blockchain projects are the ones that solve real business problems. By evaluating the suitability of your use case, seeking expert advice and following a structured selection process, organisations can unlock the benefits of blockchain and create lasting value.
How Quant can help