Companies today are scrambling to adopt blockchain and for good reason, the technology isn’t all hype. Businesses across various industries could find use in the transparency and trust that blockchain inherently brings. There are also hundreds of new B2B platforms, services, and decentralized applications (dapps) that aim to address the blockchain needs of companies of all sizes.
However, businesses should also take care when adopting these solutions. They aren’t one-size-fits-all solutions and each one has its own specific strengths, weaknesses, and purpose. In addition, implementing blockchain may involve altering business philosophies and processes. As with such major undertaking, businesses would do well putting up a strategy to guide their blockchain adoption.
Take the case of platform choice. Ethereum may be the preferred smart contract platform used for dapp development. However, a growing number of developers now find it lacking considering their requirements. Many developers prefer using scalable platforms since shifting platforms down the line can be tedious and complicated. As such, Ethereum’s scalability issues have compelled developers to give other platforms like Qtum and NEO their due attention.
Business concerns are multifaceted so a blockchain strategy requires companies to be thorough. Here are three other areas to consider when evaluating blockchain platforms and services for their own use.
Adopters must understand how different platforms are designed at the blockchain layer since this can dictate how it would work with their existing IT infrastructure. Perhaps a curious case in blockchain platforms are Ardor and Nxt. Since they are both developed and maintained by the Jelurida, many believe that Ardor is simply an evolution of Nxt. However, they have their respective advantages given particular use cases.
Nxt is designed as a single-chain blockchain meaning that each node keeps a record of all transactions. Using such a blockchain, enables businesses to run a full node on their own private networks which guarantees better uptime and increased privacy. However, one consequence of this is that such blockchains tend to take up large amounts of disk space in the long run. Bitcoin, for instance, is also single-chain and a full node now requires almost 170 GB of space to run.
Ardor’s blockchain, in contrast, is designed to have a parent chain with multiple child chains. This design allows users to just use a child chain and not run a full node. Child chains can also be pruned in order to reduce bloat so they don’t require that much space to use. This makes Ardor more appealing to smaller organizations who may want to use blockchain and avoid needing large amounts of computing resources to do so.
Blockchains are designed to be distributed and decentralized. The computing resources that support the network are spread out across peers around the globe. As such, adopting blockchain helps companies save on additional computing resources. However, businesses must still consider how particular platforms can perform.
Ethereum may be the preferred smart contract platform used for dapp development. However, a growing number of developers now find it lacking considering their requirements. Many developers prefer using scalable platforms that would allow their dapps to handle more users with ease if adoption spikes since shifting platforms down the line can be tedious and complicated.
Ethereum has already shown its scalability issues. The quick rise in popularity of a single dapp like virtual pet game CryptoKitties caused bottlenecks on the network affecting the performance of all the other dapps running on Ethereum during the craze. Bottlenecks can lead to poor customer experience to which no business wants subject its customers. This has compelled developers to give other platforms like Qtum and NEO their due attention.
Effect on Business Processes
Organizations must identify which business areas and processes would be affected by their adoption of a particular crypto solution. Many companies seek to apply blockchain to finance since the technology has already improved significantly with the launch of scores of fintech-related services.
Businesses engaged in ecommerce and retail are already looking into supporting cryptocurrencies as payment method. However, these businesses may have a hard time forming a strategy to do this. To start, there are thousands of cryptocurrencies floating in the market today. Choosing which ones to support can already be a tough choice.
While it is relatively easy to just create crypto wallets to be able to accept tokens for payments, merchants need other essential features such as fraud prevention, fiat exchange support, and shopping cart integration given today’s business environments. Not all cryptocurrencies and crypto payments services and dapps support these.
Businesses must consider their own context when evaluating blockchain solutions. Given the diversity of solutions that are coming out, it is easy for companies to end up just aimlessly following the hype. They must identify what specific goals and outcomes they want in order to know how they will be adopting blockchain. Blockchain, after all, is a disruptive technology that can fundamentally change the way businesses work. They must carefully invest in high-impact solutions that would deliver the most value.