The Need for Blockchain in Today's Business

By CIOReview | Thursday, May 10, 2018
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The blockchain was created by a person or group of people known as Satoshi Nakamoto. The blockchain technology is praised as a technological innovation, which allows revolutionizing how businesses trade and interact with each other. The primary reason behind this reputation is due to blockchain’s properties of allowing mutually mistrusting entities to exchange financial value and communicate without relying on a trusted third party vendor or enterprise. Moreover, a blockchain provides integrity protected data storage and allows providing process transparency within the organization.

While organizations look for reasons to implement blockchain into their environments, an inherent risk for an organization's managers to explore new technologies and dive into conclusions about the technology without exploring alternative options. According to many types of research, a systemic change to the infrastructure rather than technological advancements will provide better and cheaper solutions to the existing issues at hand.

With this in mind, there is a list of simple control questions to help guide organizations through the decision process as to whether they should explore blockchain technology or use the traditional database:

1. First of all, don’t fix it if it works. If the current database setup functions properly and meets the requirements of the organization, there should be no rush to rip and replace the technology. A typical replacement of the infrastructure involves rethinking the workflows, re-coding the solutions according to the new technology, and requires many years for it to gain maturity as the current database.

2. Dependence on a third-party provider for transactions or creating trust among various members. If this holds true, it might be the perfect time to view blockchain technology as a viable technology.

3. If the most important factor for the organization remains its performance and transaction speed, then such a company should use their existing databases for now.

In order to make informed decisions for adopting blockchain technology, the Internet offers numerous flowcharts for when it might be best to use a blockchain. While blockchain may have some limitations as a technology, it has proved its worth in many potentially valuable use cases such as management of shared ownership, royalty distribution in the music industry, and cross-border payments.