It's easy to get carried away with the promises and hype that has been generated around the blockchain. It is essential to intelligently approach the blockchain project.
However, most solutions marketed as “blockchain” lack key components, notably tokenization and decentralization. This “blockchain laundering” creates confusion in the marketplace.
It is difficult for CIOs and business leaders to assess the benefit-cost analysis of blockchain. Therefore, the current picture is incomplete and does not address the evolving nature of blockchain-based technology.
Understand the phases of developing a blockchain project
“When considering blockchain, CIOs need a model that allows them to easily and accurately align their business needs with the appropriate blockchain solution.”
In fact, the consultancy has created the Blockchain Spectrum. Its purpose is to examine the gradual evolution of blockchain-based solutions. Additionally, it tries to show how this path aligns with the anticipated value that companies can realize.
It seems clear that CIOs should not ignore this technology. To do this, they must know the development phases of a blockchain project. For experts, it is also essential that companies do not fall into the hands of providers who claim to have complete blockchain development solutions.
It is dangerous to get carried away with a false sense of progress and capability. Organizations could easily take the wrong route. This situation would leave them out of position to fully capitalize through the blockchain.
Blockchain and Blockchain Spectrum
The actual blockchain contains five elements: distribution, encryption, immutability, tokenization, and decentralization. When combined, these elements allow organizations to reap the true benefits of blockchain.
This is how the scenario is built so that two or more parties, who do not know each other, interact safely. They will do so in a digital environment and will be able to exchange new forms of value and assets.
The four archetypes that make up the Blockchain Spectrum are broken down based on the traits and components they have. You have to be aware that some of them will not be fully developed for years. Each of these phases of a blockchain project offers opportunities and risks, but CIOs must start experimenting at some level.
These technologies provide the building block foundation upon which future blockchain-based solutions can be built. The operational effectiveness of distributed data management systems, for example, can be increased by utilizing these blocks as a component of non-blockchain solutions. The basic components include cryptography, distributed computing, networks, and peer-to-peer messaging.
What phase are we in?
Blockchain-inspired solutions utilize three of the five elements: distribution, encryption, and immutability. In general, these solutions will lack tokenization and decentralization. This means that they often focus on efficiency or re-engineering of existing processes.
These blockchain-based options will dominate the enterprise implementation approach during the early years of this decade. For now, solutions are generally limited in scope and based on maintaining established processes and architecture.
Services such as centralized notary, distributed or replicated data stores, hashing/signing, and a messaging layer are common today. Critically, they lack the ability to tokenize multiple forms of digital and non-digital assets and are designed without a foundation for decentralized operations and governance.
Complete Blockchain
Around 2023, complete enterprise-ready blockchain solutions will emerge. They will use the five elements of blockchain and offer a path to completely new business models. They will use dynamic smart contracts, tokenization, and decentralized operating structures. These solutions will deliver the full value proposition of blockchain.
New business models are able to be introduced as a result of these capabilities. The introduction and use of blockchain-enabled tokens will enable previously impossible value exchange systems, especially at the micro level.
To distinguish these solutions from blockchain-inspired solutions, a research system can be followed that observes the following steps:
How the technology is implemented
How the solution handles the data
Where the data controls sit
Whether tokenization is an inherent design facet
How transaction management is enabled
How on-chain/off-chain data synchronization occurs.
It seems clear that by 2025, blockchain will incorporate complementary technologies, such as the Internet of Things (IoT), artificial intelligence (AI), and SSI. Blockchain-enhanced solutions will lead to business model changes as autonomous agents gain the ability to interact commercially and operate independently of a human.
CIOs need to start exploring and evaluating current market solutions. They also have to learn the phases of developing a blockchain project, as well as discuss the potential for massive changes to the rest of the business.
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