In the past couple of years, the world has seen rapid proliferation of decentralization technology. Solving issues related to identity and data integrity to enabling crypto transfers, decentralization benefits surpass traditional business models by a mile. Institutions like European Commission became catalysts by establishing regional collaboration bodies like The European Blockchain Observatory and Forum. Market analysts provided intellectual support to the industry. Avivah Litian of Gartner, in a recent blog, mentioned that 2021 is the year of enterprise blockchain to come out of trough of disillusionment. As the pandemic forces enterprises to adopt digital, blockchain platforms will become scalable, interoperable, and support smart contract portability.
In our experience of implementing blockchain-based digital transformation, we found three major hurdles that organizations face:
Blockchain is a team sport. Unlike most technologies, blockchain requires collaboration among participants to establish decentralized or distributed architecture, crucial to bringing in the immutability of the ledger. Industry has seen large players, who launched distributed ledgers and claimed my blockchain, fail when it comes to creating network effect by on-boarding external parties.
The right way to address such problem is through education and experimentation. When the Telecom Regulatory Authority of India (TRAI) initiated the journey to solve spam calls issue in India, it started dialogue with the telecommunications companies, system integrators, cloud providers, consultants, and telemarketers. Multiple brainstorming sessions and proof of concepts led to the release of a regulation that illustrated how a distributed ledger technology (DLT) integration with telecom legacy systems can solve the spam and fraud calls menace. Today, this DLT application caters to an over 800-million subscriber-base of India.
The complexity to move from prototype to industrialization is a big reason why business starts losing interest, leaving significant financial benefits untapped. Notable protocol communities, like Hyperledger, were quick to learn and evolve, addressing scalability issues and developing new functionalities at the core. These protocols are now flexible to a certain extent.
In 2020, the market found modular tested blockchain-platforms-as-a service (BPAAS) applications agnostic of protocols that enable ease of deploying blockchain networks and distributed applications. Solution kits and sandboxes are now available on freemium basis to test out and build industrial-grade networks. Organizations can access such verticalized platforms to cater to their business case and collaborate.
Blockchain is more business-oriented than IT. Time and again, we found organization’s business groups leading blockchain implementation rather than CIO groups. In procurement, for instance, key success parameters for visibility application tracked by an automotive group were accounts payable, contract adherence, dispute resolution, and operational efficiency.
When it comes to costs, blockchain nodes are often termed expensive math machines that require humungous amount of energy for processing probabilistic equation. This is true, but only for some public chains. Private permissioned blockchain works on simpler ways of processing transactions with negligible costs.
The cost of hosting and running a blockchain network has gone down significantly with the advent of BPAAS models, and it continues to go down with scale up.
The year 2022 will bring an era of blockchain collaboration with AI/ML and IoT to fabricate end-to-end transformation platforms. Breaking the innovation silo of organizations, they will enable decentralized trusted autonomous application that churns legacy data to delivery-tangible impact with zero human interaction.