What are the Four Pillars of A Strong Enterprise Use Case?
There are generally 4 pillars for meeting a strong enterprise blockchain use case for an enterprise that is considering blockchain or distributed ledgers.
Whether your the enterprise looking at the blockchain for solutions to your “world of pain” or your an IT Vendor or Solutions Integrator helping a customer with a blockchain workshop then discussing the pillars is fundamentally important.
Blockchains are no panacea to most organizations and to be fair, honest and blunt some of “blockchain consultants” are no more than the old “snake oil” salesmen of the 1800’s taking advantage of the vulnerable.
Blockchains holistically just suck at TPS. Blockchains are also limited in scope and for that matter not many people really have a clue what they are used for except for cryptocurrency.
Now with that off my chest, “blockchain” can clearly provide value but only in limited use cases. The financial sector and the logistics sector stick out as the clear winners for the scope of use cases.
Lets discuss some areas to consider.
For example, if your data requirements are only used by one organization then your use case would not likely be a strong use case for blockchain.
However, a stronger use case would be when you had a consortium requirement around a shared collaborative ledger that could benefit from most or if not all of the pillars for example.
What are the four pillars? Read On.
The four pillars of establishing blockchain use cases areas are as follows.
1. Requirements for a Distributed Ledger that would be “disbursed” between a collaboration of members. Members could be internal departments, consortium based or even open. Peer to Peer or gossip protocols are usually deployed.
2. Smart Contracts Platform Requirements that would benefit from enforcement from automated code. The code is a truth machine that is efficient, immutable and easily deployable.
3. Immutable Ledger Requirements are needed to meet compliance requirements and for audit sanity.
4. Scale of Economics where companies could benefits from a cost savings thru collaboration whether it is through replacement or attrition of technologies such as legacy or thru reduction in force.
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Use Case Perspectives
When considering use cases for an enterprise blockchain it is imperative to understand that there is no single blockchain for every use case available.
Even though some blockchain vendors sometimes will tout they are “Cross Industry” you must realize of course there are clear considerations that merit distinction.
Reality is that some use cases are viable on one or more blockchains and some are not. You dont want to buy a Porsche when you need room for eight kids. On the other hand on a trip to Vietnam I saw a moped with 6 people on it so who knows. If you need a blockchain that has a far and wide developer community then look at Ethereum. If not then perhaps you can look at EOS or Cardono or any other number of platforms.
On the other hand if your use case is for Ripple then its really only a good use case for that distributed ledger for interbank commerce thus smart contracts are not supported. Using Corda would likely serve you better if smart contracts were required.
Business Requirements or Technical Requirements? Or Both?
When thinking of the blockchain there are business requirements and technical requirements. The question is does your organization need to meet specific business requirements or technical requirements. In most cases business requirements drive the technical requirements and not the other way around.
Business requirements could be more focused on the compliance requirements, governance, industry vertical or labor/cost reductions.
Technical considerations are general more detailed such as requiring a specific blockchain programming language, oracle or off chain demand or other strict requirements that are business driven such as compliance.
If one concludes the wrong understanding of the technical merits this could derail the enterprise blockchain project as a whole. Enterprise architecture best practices clearly fit in here such as TOGAF as well.
Blockchain Features and Components
Blockchain vendors are generally either specialized or “Cross Industry” and therefore its either one size fits all or one size only. Know your target requirements. Sort of like going to buy a home, knowing your budget and square footage requirements would be very helpful.
Some of the blockchain components are customized for specific use cases such as the consensus algorithms, distributed ledgers, pluggable components, encryption methods and licensing models.
Blockchain features are also pluggable or modular as well especially in some enterprise blockchain frameworks such as Hyperledger.
For example in Hyperledger Fabric you can choose the database such as CouchDB or LevelDB depending on your requirements for complex queries. You may also want to choose the HSM for example as well.
One more note is that most blockchains are based on an open source approach to blockchain development and thus the “tribal” support is more noticeable due to the fact the developers will be working on specific features and feature sets that are “requested” or “sponsored”.
Choosing an Enterprise blockchain.
One of the first thoughts to consider is whether there is a requirement around permissioning or compliance demands.
If there are requirements, your life has gotten somewhat easier. You can throw out Ethereum, NEO or EOS for example.
There are many areas of concern when choosing a blockchain platform which can certainly be a concern. Some areas that are very common would be
- Integration of existing services
- Cost models used (Capex/Opex)
- Developer expertise required and resources available
- Transactions per second (TPS)
- Legal Prose
- Modularity supported such as HSM, Consensus, etc.
Lets take one quick look at the Corda Blockchain Platform.
R3 Corda as some may know is a very specific blockchain that roots its real merits that shine to the targeted sectors of financial and insurance services.
Note that Corda has significantly evolved since its inception in 2016 from a small consortium.
Much of the use cases have revolved around “asset and cash interactions” that require a “compliant atomic transaction”. This is a complex way to state the transaction has to be correct the first time. Banks just prefer to not to lose money:)
It is important to note that assets do not just have to be financial or insurance related to visit Corda for a use case possibility. The use cases could be extended with some planning to consider Corda.
Originally, R3 Corda was really designed as a distributed ledger to solve the never ending challenge of privacy issue of blockchains.
The market it targets is the financial industry specifically the wholesale financial markets. The figure below specifies the main benefits of Corda.
Corda was designed for privacy as we stated in the previous chapter. It does this by sharing only the transaction within that customer network only and is similar to channels in Hyperledger.(no broadcast data propagation).
Corda also has a “pluggable” consensus approach similar to Hyperledger at least at the macro level. This allows the “notaries” to choose a consensus algorithm based on their requirements in terms of privacy, scalability, legal-system compatibility, agility and perhaps other reasons.
Essentially it was designed to be distributed ledger that addresses “Privacy and Interoperability” which are still fundamental design principles of Corda.
Notaries were designed in Corda to be clusters of distrusting nodes operating a BFT flavored algorithm. The figure below shows the highlights of Notaries in Corda
R3 Corda was first built to target the financial industry mainly where recording, managing and automating financial agreements are manual processes with high inefficiency.
The Golden Goose of Corda IMO is the “Legal prose” as it is known in the legal industry as an approach to legal writing as a step-by-step process that could be legally enforceable.
Corda really meets the targets of its niche market. No questions asked.
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Pre Order my book on Amazon! Architecting Enterprise Blockchain Solutions from Wiley Sybex.
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Joe Holbrook, The Cloud Tech Guy Jax, FL
Carry on fellow Blockchain Gurus!