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Blockchain is no longer a word that is tied to cryptocurrencies. It has moved into other sectors like supply chain, healthcare, governance, and much more to take it to the next level. Integrating blockchains into their existing businesses, enterprises can improve transparency and enjoy other advantages as well.
But the thing here is, implementing blockchain is not like plugging a charger into the system! It demands careful planning and execution. Most of the companies would just rush into blockchain without aligning with real needs, and end up facing issues in the long run or wasting resources.
In this blog, we will learn the following,
So, at the end of this blog, you will have a clear roadmap in front of you, where you can evaluate whether blockchain is really needed for business, and if the answer is yes, then how to integrate one and make it work.
Let us begin!
Blockchain is basically a distributed ledger that records all transactions and other data across several computers. The most interesting aspect is that this data cannot be changed at all. So, it is not like traditional centralized servers! Blockchain doesn’t come under the control of a single authority.
Here is a list of core features of blockchain,
These features depict why blockchain is being adopted by businesses across the world. In supply chains, it helps in tracking the packages and goods effectively, which reduces fraud.
In finance, it offers faster and cheaper cross-border payments. Similarly, in healthcare, it enhances security and encryption of medical records, which keeps data theft at bay.
For businesses, blockchain isn’t just a new technological upgrade! It's a key to success, and it lies in understanding the blockchain at a deep level and knowing how to and when to apply it in your business. Let us learn about it in detail in the upcoming sections.
Before diving into blockchain, the first and foremost step is to ask yourself a simple question to yourself, that is “Do you really need it?”
To be honest, not every business problem requires blockchain, and adopting it without a clear goal can lead to both resource as well as time wastage.
So, start by identifying areas where blockchain can solve pain points. Below is a list of a few example issues that blockchain can solve.
Supply Chain Inefficiency
Blockchain helps in tracking goods effectively in real-time and improves transparency from production to delivery!
Prevention of Fraud
Since no data in blockchain can be changed, it is essential in fields like finance and real estate.
Payments and Settlements
Enables super-fast and secure cross-border transactions without requiring any intermediaries.
Data Security
Protect sensitive data from tampering and exploitation, especially in sectors like,
The next step is to evaluate whether blockchain is the right fit or not, for instance,
If your business depends heavily on intermediaries, then blockchain can definitely streamline operations. If transparency is required, then blockchain adds clear value.
But if your processes work well on centralized databases and speed is more crucial than decentralization, then blockchain may not be your cup of tea. Defining your goals at this stage is essential as it ensures, blockchain adoption is wholly purpose-driven!
Once you have identified where blockchain fits in your business, the next step is to choose the right blockchain and platform. This is a critical decision as it shapes,
Types of Blockchain
Public blockchains ( like Ethereum and Bitcoin)
These are open to anyone, and highly transparent, but slower and expensive too. And they are best for applications where trustless systems matter. One good example of this is tokenization or NFTs.
Private blockchains (Hyperledger Fabric and Corda)
These blockchains are controlled by a single entity, and are faster and secure, but less transparent. And it is highly suitable for businesses that require data privacy, like the healthcare and banking sectors.
Also read: How to create a private blockchain?
Consortium blockchains
These are semi-decentralized and it governed by a group of organizations, and are ideal for industries like supply chain and finance, where multiple stakeholders require shared access.
Hybrid Blockchains
These are the combination of both public as well as private blockchains, which require transparency and offer flexibility for businesses that balance between openness and confidentiality!
When selecting a platform, consider factors like,
Remember, the right choice should align well with your business goals!
Learn more about: Best Blockchain Programming Languages That Should Not Be Missed.
After selecting the right platform, the next step is to design how blockchain will operate with your business. Think of it like setting the rules and other commands that make your blockchain solutions super-functional and highly scalable.
Key Elements to Define
Network Participants & Permissions
Here, you have to decide who will be part of the network and how much access they will have. Say, for example, in a supply chain, different users have various levels of access, as,
Governance Model
Define how the decision will be made. Like,
Data Structure & Storage
Decide on how the data needs to be stored, whether to store it on-chain or keep heavy files off-chain on the blockchain. This helps you to balance both transparency and performance.
Smart Contracts
Take a list of processes that can be automated with the help of smart contracts without the need for intermediaries, like,
Every blockchain comes with its own consensus mechanism. It is nothing but a methodology through which participants gain the right to validate a transaction and then add it to the block. So, select the right mechanism, as it has a huge role in determining your systems’ security as well as performance.
Common Consensus Mechanisms
Proof of Work (PoW)
It is used by Bitcoin and is highly secure, but it consumes a lot of energy. And is not ideal for modern businesses due to heavy costs.
Proof of Stake (PoS)
Here, validators stake tokens, unlike proof of work, and it is faster and energy-efficient. And is widely used in networks like Ethereum.
Delegated Proof of Stake (DPoS)
This is a variation of the POS mechanism, where stakeholders vote to select a validator, and each group elects a validator, they are also known as a delegate. And they are offered the right to validate a block.
Byzantine Fault Tolerance (BFT)
It ensures agreement even if some participants act suspiciously. It is suitable for private and consortium blockchains.
Proof of Authority (PoA)
Here, validation is done by only approved authorities, and is very fast and cost-effective, but is less decentralized! And it is best suited for businesses that prioritize speed!
How to Decide?
For public ecosystems, PoS or DPoS are often preferred for scalability. While for enterprise solutions, BFT or PoA are good choices, as they offer both security and speed without much energy consumption. Selecting the right consensus mechanism ensures your blockchain offers the required trust along with business needs.
This stage is full of execution, and you have to understand the fact that blockchain is not a one-time integration! It requires a step-by-step approach to keep risks at bay!
It is advised to start small! A minimum viable product helps you to test feasibility before going with large resources. Say, for example, a retailer might leverage blockchain for just tracking one product line.
Create smart contracts to automate the core business processes. Rigorously test to find out errors and vulnerabilities. A flawed contract can be exploited and can even lead to heavy expenses.
Test the blockchain solution in a controlled environment. This stage reveals performance, usability, and integration gaps without risking the whole business.
Connect blockchain with your existing infrastructure, payment gateways, or customer platforms. Smooth integration ensures that blockchain makes the workflow easier rather than disrupting it.
Integrate security protocols to safeguard your system from fraud and data breaches. This helps you to earn trust among users and saves you from unwanted penalties.
Monitor the performance of your system at regular intervals and gather feedback. As blockchain is not a static thing, it undergoes constant upgrades. So, add new features as your business grows!
Yes, of course, blockchain has the potential to offer various advantages, but it does come with a few challenges as well. So, having a good understanding of these challenges would be beneficial for you to plan accordingly. Let us view them one by one.
Blockchain is a specialized field that requires skilled developers, architects, and other professionals. But, the sad thing is they are in demand, and only limited experts are available, and this makes the implementation process both expensive as well as time-consuming.
Public blockchains like Ethereum can face congestion due to high traffic, which can lead to high fees as well. For businesses handling several thousand transactions per second, scalability can be a cause of concern!
Most businesses run on their existing ERP, CRM, or other database systems. So, integrating blockchain seamlessly into this infrastructure can be quite complex!
Since blockchain operates across borders, regulations can vary widely from one region. So, when the rules are not clear, several factors can create compliance risks, like,
Various aspects can be expensive, like,
Without a clear picture of the ROI strategy, the costs can go high!
Implementing blockchain into your system is not a one-time setup. It is a long journey! Here is a checklist that you must consider for sustainability.
As already mentioned, technology is rapidly evolving! It is not the same. So, choose carefully the platforms and tools that offer you regular upgrades! This ensures that your blockchain doesn’t become outdated after a few years.
Blockchain adoption is growing, and the regulations are as well. So, regularly monitoring changes around data privacy and smart contracts to avoid compliance risks.
Blockchain adoption can be better when the people behind it are strong. So, invest in training employees and educate them to ensure maximum adoption.
Business requires a shift, and your blockchain system must adapt to it. Whether it is adding new participants or integrating new technologies like Artificial Intelligence, flexibility is the key!
Blockchain is already shaping industries. These real-world examples show how businesses are leveraging it to get maximum out of it.
Walmart and IBM’s food trust is one of the prominent examples of blockchain use cases, where it is used to trace food from farm to shelf in just a matter of seconds. This not only improves safety but also reduces waste and prevents adulteration.
Ripple and Stellar blockchains enable instant transfers in a fraction of a second. Thus helping businesses to avoid huge delays and high expenses.
Also read: Why Banks Are Adopting Blockchain Technology?
MediLedger uses blockchain to secure and verify pharmaceutical supply chains, which prevents fraud and ensures compliance with healthcare regulations!
Media companies and artists are using blockchain to establish ownership of digital assets, which opens new revenue streams through,
Projects like Sovrin offer decentralized identity verification, which reduces fraud while giving users complete control over their data!
Gain In-depth knowledge on
Blockchain is no longer just limited to cryptocurrency! It has evolved into several industries. From tracking products to offering a secure payment environment, blockchain offers various advantages.
But, integrating blockchain into existing businesses requires proper planning, so they are advised to examine closely and determine whether their business really needs blockchain or not. So without a proper goal, you won't have a clear roadmap.
If you are an enterprise and planning to integrate blockchain but don't have any idea where to start, then we are here to assist you! At Fourchain, a leading blockchain development company, we help businesses integrate their existing systems with blockchain, which helps them take their business to the next level! Take the first step by contacting our experts today.
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