With all the brouhaha over blockchain in the media and the continuous chatter of how it’s going to take over the world’s IT infrastructure, it’s very likely for enterprises to get confused about what might or might not be a good use case to do a PoC or a real implementation in blockchain. In our experience, there are some basic conditions that need to be understood to assess the eligibility of a use case for blockchain implementation.

The Database

Blockchains are a technology for shared databases. So the enterprise needs to start by knowing why it’s using a database, and if there are benefits or limitations that the users face by using a centralized or distributed database.

Multiple writers

Blockchains are a technology for databases with multiple writers. In other words, for a blockchain implementation, the enterprise needs to have more than one entity, which is generating the transactions that modify the database. In an implementation, the writers will also run “nodes” which hold a copy of the database and relay transactions to other nodes in a peer-to-peer fashion.

Absence of trust

If multiple entities are writing to the database, there also needs to be some degree of mistrust between those entities. In other words, blockchains are a technology for databases with multiple non-trusting writers. What do I specifically mean by mistrust?

Disintermediation

Blockchains remove the need for trusted intermediaries by enabling databases with multiple non-trusting writers to be modified directly. But the question the enterprise needs to ask is: Do they want or need this disintermediation? Good reasons to prefer a blockchain-based database over a trusted intermediary might include lower costs, faster transactions, automatic reconciliation, new regulation or a simple inability to find a suitable intermediary.

Transaction dependency

Blockchains truly work where there is some interaction between the transactions created by the multiple data writers. This means that transactions created by different writers often depend on one other. In an ideal scenario, if the data creation and transfer in an enterprise does not fulfill each of the above conditions, they should not be using a blockchain, unless there are other strong reasons to move into blockchain implementations based on industry scenario, or long term sustainability issues.