A Forbes article in January last year predicted that 2019 could be the year of the enterprise Blockchain and it certainly was a big year for Blockchain in general.
As Deloitte’s 2019 Global Blockchain Survey shows, 2019 was the year when ‘Blockchain tourism’ officially ended and companies started to seriously consider the practical applications of the technology. Financial service and FinTech brands led the way throughout 2019 as other industries like media, telecommunications, and healthcare started to explore the potential opportunities.
This survey also showed a continued increase in investments with 40% of companies willing to invest $5 million or more in Blockchain initiatives while 53% rank Blockchain as a top priority within their organisation (a 10% increase from 2018).
So, as the Blockchain market begins to mature and play a role in companies’ strategic vision, where does this leave enterprise Blockchain?
The Current Enterprise Blockchain Market
At the point of writing and despite company demand, there are relatively few enterprise-ready blockchain platforms on the market. Blockchain solutions based on Trade Finance consortia between connected networks are some of the closest examples of enterprise grade-production cases in the financial service market.
Within this sector of the market, 21 of the consortia across the world have received public support from 90% of FTSE 100, 250, 350. Of these FTSEs, eight are in Banking & Finance sectors while 5 are in the EMEA. Furthermore, 41% of enterprises are willing to join a consortium in the next few years if objectives align while more than 53% rank Blockchain as top 5 strategic priority.
When to Consider the Application of Blockchain
By now, most senior leaders recognise the importance of Blockchain or have, at very least, recognise its potential use and eventual mainstream adoption. As Blockchain continues to mature, companies will increasingly jump on the bandwagon.
Blockchain features like decentralisation, immutability, business process automation with smart contracts and interconnectivity with other alien technologies hold exciting potential. Blockchain is also not a one-size-fits-all solution. So, it’s important to fully consider whether Blockchain can solve your problems before implementing this technology.
Start by architecting your solution to uncover whether Blockchain is part of the answer and necessary within your organisation.
Important Aspects of Blockchain Technologies
Blockchain is essentially a collection of long-trusted technologies wrapped up with a distributed consensus algorithm that then operates in heterogenic, geo-distributed networks with different topologies. More specifically, Blockchains like Ethereum, Hyperledger and Bitcoin consist of well-known, long-running technologies like:
- Public Key Cryptography & Certificates. Public key cryptography and certifications are used to identity authorisation and authentication, resources allocation and API Keys, similar to PGP and OpenSSL.
- Signatures. On Blockchain, signatures are derived from your keys and certificates.
- RPC, gRPC or similar. RPC or gRPC offers a more flexible API layer between services than REST.
- PoW. PoW acts as a defence mechanism to prevent spam and DDoS.
- PBFT, PoA, PoW, and others. PBFT, PoA, PoW, etc. form part of consensus algorithms like Zookeeper, Consul, Etcd, Kubernetes, Kafka.
- Digital Money. Digital money like HashCash, BitGold, E-Gold, B-money, DigiCash and others are early examples of this idea.
- Smart Contracts. Rather than outdated, old-school custodial agreements, smart contracts offer a more advanced and modern solution.
- P2P. MNet and BitTorrent were used as a direct peer-to-peer file sharing protocols.
- Hash Trees and Merkle Trees. We’re all familiar with git, which provides the hashed chain for validations.
So, while Blockchain itself is a relatively new technology, the underlying, blockchain-like approaches have always been around. And, used when there was a need to securely connect with untrusted and external sources.
Benefits of Blockchain Technology
When questioning whether Blockchain should play a role in modern organisations, you need to ask yourself whether your company requires any of the following benefits:
- Tamper resistance (Immutable-records). With Blockchain, data can’t be altered or deleted. You can only update the record using a timestamp approach.
- Data Consistency and Access. Blockchain gives all participants the same view and access to records without exception.
- Data Integrity. Blockchain makes it easy to prove the evolution of a record and uncover any individuals or actions associated with it.
- Persistence & Auditability. Data is stored in an easy to retrieve and safeguard manner, which makes it suitable for storing data over the long-term.
- Trusted Automation. With Blockchain, participants can make sure they approve of the agreed logic.
- Decentralisation. Data and any resulting actions are not controlled by a single entity, which ensures the trust and longevity of the network.
- Selected Confidentiality. Blockchain allows you to reveal data to a selected group of participants on the network.
- Extensibility and Flexibility. You can extend your Blockchain model in-house and don’t need to wait for a centralised provider to release new features.
Three Main Challenges of Live Production for Enterprises
Once you’ve completed a PoC, the next step is to roll out to live production. Typically, during this process, enterprises face three main challenges centred around governance, regulation and technology.
When implementing a Blockchain solution, companies often encounter the following tactical pain points:
- Interoperability. Struggling to find a way to interoperate between DLT and legacy systems.
- Scalability & Performance. Main blockchain protocols fall behind.
- DevOps. Complexity in the team setup and involved processes.
- Production Readiness. Missing a platform that provides SLA.
- Integrations. Link cost with the legacy infrastructure.
- Analytics. Understanding of the business what’s happening.
These issues cause can have some pretty serious impacts on the success of your project. In more than 90% of use cases, we’ve found that the required infrastructure investment for deploying and integrating a blockchain application exceeded the Return on Investment or ROI. As a result, many Blockchain projects are put on hold or cancelled entirely.
Key Factors to Consider Before Implementing an Enterprise Blockchain Solution
Implementing a Blockchain solution certainly isn’t easy, and you don’t want to invest time and money only to realise that it won’t deliver the expected results. So, before you start to implement a Blockchain solution, it’s important to think about the following points.
Do You Need an Enterprise-Ready Platform?
An enterprise-ready platform for Blockchain is a cloud-native platform that provides the complete ecosystem to support companies during and after the implementation process. The platform allows you to integrate your cloud and legacy services with any Blockchain protocols and emerging tech stack. This often allows companies to achieve a more successful and seamless transition.
Enterprise-ready solutions include the complete protocol (DLT) and infrastructure (cloud provider or data centre) agnostic. It also provides all required infrastructure, automation, monitoring, integration and analytics for Blockchain adoption and future sustainability.
This solution goes beyond Blockchain as a Service to help organisations integrate and scale their on-premises cloud architectures to any DLT/Blockchain network.
Do You Need to Interchangeably Use Multiple Blockchains?
If so, you might need to consider multi-protocol or cloud agnostic technology. Many companies and markets require the ability to operate between different blockchain protocols. For example, if you want to interchangeably use multiple blockchains based on the consortium you've joined or had unique application needs.
An infrastructure platform designed as an abstraction middleware provides identical operations regardless of the network you’ve joined.
How Will You Mitigate Risk?
Developing new products on the Blockchain carries an element of risk, such as associated cost, monetisation, or execution. So, it’s important to understand and be aware of these challenges and have a plan in place for avoiding or mitigating any risk.
Successfully Transition to Blockchain with Ocyan
Before you roll out your PoC project to implementation, schedule a call with our Blockchain experts to find out more about our on-premise ‘cloud operating system’. We’ve worked with many tier-1, tier-2 and tier-3 organisations within the FinTech, Logistics, Energy, Oil and Gas and Telecom industries to scale, deploy and manage Blockchain applications within the enterprise environment.
Our on-premise ‘Cloud Operating System’ helps with the formation and management of trusted and secure Blockchain consortia, backend and legacy integrations with Blockchain and P2P networks and serverless data pipelines for any Blockchain networks.