6 Tips For Successful Implementation Of Blockchain In Business
Blockchain has become popular over the past few years, but not everyone knows how to implement it. To take advantage of this revolutionary technology and make it part of your business, you’ll need to understand the basics of blockchain and how it works.
Moreover, blockchains are decentralized, meaning no single entity controls the system; instead, every party has access to the ledger and can see every transaction.
Let’s see how you can implement Blockchain into your business and make the most of it in your everyday operations.
Tips To Successfully Adopting Blockchain For Your Business
If you’re planning to introduce Blockchain into your business, here are some valuable tips to ensure blockchain adoption goes smoothly.
1. Prepare a Use-Case
Use-case is a graphical description of the steps involved in the process of user interaction with a system or product.
Blockchain technology is gaining rapid momentum in businesses. With its ability to store information securely, companies can use blockchain for everything from inventory management to data storage.
When discussing the implementation of blockchain in business, the initial step is preparing a use case for your business. To identify a use case, you must analyze, define, and organize your demands for a blockchain.
You would need to consider specific questions such as:
- Why do I need a blockchain?
- Why does my business need to use blockchain technology?
- What are my business targets and objectives?
To be specific, answering these and related questions would help you understand why you need a blockchain and what steps to take from here.
2. Create a Proof of Concept (POC)
As you have done your research, the second step is to execute and develop your Proof of Concept to prove if the implementation would work for your business. The concept of POC demonstrates if specific performance is realistic for your business or not.
A Proof of Concept is not complete without understanding the rigid planning phase that precedes it. Again, it would help if you considered specific relevant questions that would aid you in evaluating your Proof of Concept step by step.
The questions would be based on the business and its requirements. You must consider many factors, including competitive challenges and market requirements of your business.
Few questions you might consider in this phase:
– What business concern am I trying to solve by implementing a blockchain?
– What positive results am I expecting?
– How am I going to transform my business with the help of a blockchain?
The steps included in the Proof of Concept are:
1) Formalize the idea.
2) Meet with a developer and create a prototype of your idea in code, design, sketch, etc.
3) Test your prototype once it’s created.
4) Gather relevant information from your business.
5) Make decisions about which data you want to store in your blockchain.
3. Selection of Blockchain
Selecting a suitable blockchain for your business is crucial. With so many options available, choosing an effective one for your business becomes difficult for many people.
There are three significant types of Blockchain: public, private, and hybrid.
A public blockchain would include many nodes anyone can join, whereas a private chain would be accessible only by invited parties. However, Hybrid chains have both public and remote nodes.
When deciding the type of Blockchain best suited for your business, you should consider several factors, including decentralization, security level, and user privacy/rights.
Several cutting-edge blockchain platforms include:
- Hyperledger Fabric
- Ethereum
- Multichain
- Quorum
- Open chain
- Stellar
- Corda
4. Initialization of Blockchain
Initializing the Blockchain for your business is one of the essential parts, but it can also be most confusing. How you do this varies depending on which type of Blockchain you use. Once the chain has been initialized, it is time for you to start adding blocks of data to that chain. That data can be anything from a simple transaction between two parties or information about a product being manufactured and sold.
Blockchain’s decentralized ledger can help establish trust and transparency within your business, improve security, and increase efficiency.
5. Selection of Right Consensus Protocol
The proper consensus protocol depends on your business needs. The consensus protocol that your blockchain is using significantly impacts its performance. Different consensus protocols are designed for other purposes.
For example, Proof of Work (POW) is excellent if you need a high degree of security, but it’s not particularly good if you want fast transactions. Proof of Stake (POS) of Proof of Authority (POA) is the opposite; it’s slower but less energy intensive. Lastly, use Delegated Proof of Stake if you want a fairer voting process that’s cheaper.
To decide which is best for your company, ask yourself:
-Do I care about my company’s speed, or would I instead lower costs?
-Do I need an algorithm where all participants can take part equally?
These are just a few questions you should ask yourself when figuring out what protocol will work best for your company.
6. Designing the System
The designing of Blockchain requires a delicate approach.
Designing the Blockchain for your business can be daunting, but it is essential to ensure success. The first step is identifying the problem the Blockchain will solve, why it is needed, and whom it will impact.
Once you have identified this information, you can begin designing the Blockchain by deciding if you want an open or closed system, how many nodes are required, and what consensus algorithm should be used (e.g., PoW vs. PoS). Once all of this has been decided on, test out your design before putting it into production!
The only function of adopting Blockchain for an enterprise is to provide a solution for every possible issue you might encounter within a business. The process may need further evaluation if the new system is potent but missing some critical factors in the existing methods.
Building the Ecosystem
An ecosystem is required once many stakeholders start engaging with the Blockchain. The communities inside the larger blockchain community form an ecosystem.
A community ecosystem will facilitate a greater understanding of the blockchain industry and foster trust between businesses.
The stakeholders must resolve the following issues before building an ecosystem:
- Terms of engagement.
- Without bias, how can costs and rewards be shared?
- Governmental mechanisms are in place.
Critical Challenges for Blockchain Implementation in Business
Blockchain technology has the potential to fundamentally change how businesses operate, offering increased trust, efficiency, and security to its users. However, it is still challenging for companies to adopt this technology effectively.
Let’s explore some of the biggest challenges facing blockchain implementation in business today.
Problem with Scalability
Blockchain scalability is one of the most significant obstacles to global adoption. Currently, most blockchains can only process a few transactions per second. For example, bitcoin can process roughly seven transactions per second, and Ethereum can process around 30 transactions per second.
If bitcoin were the currency for a fast food chain with ten restaurants operating globally, it would take up to an hour for the transaction to be processed at each restaurant. Similarly, if Ethereum were used as the global currency for Amazon’s marketplace, with 100 million items sold monthly, it would take up to 12 hours for every sale on Amazon’s marketplace to be processed by Ethereum. With these limitations, blockchain implementation for businesses is still unscalable.
Difficulties with PoS Consensus Protocol
One of the significant challenges with using a PoS protocol is that it’s difficult to reach a consensus. The more people are involved, the harder it is to agree.
If you are facing major issues while implementing blockchain technology, you can take help from an experienced blockchain software development company to increase productivity.
Concerns over Hacking
Blockchain is the technology that underpins Bitcoin and other cryptocurrencies, but it can also be used to track items like shipping containers through a supply chain.
The Blockchain has revolutionized how transactions are processed and stored, but there are some concerns about security since data is stored across a network. Hackers could corrupt the data or threaten an entire system by gaining access to a large chunk of the network’s computing power.
Lack of Knowledge by Employees
There is a lack of knowledge about the technology and its implementations. This lack of knowledge leads to a feeling that the technology is complicated, leading to fewer people wanting to use it. One way to overcome this issue would be for companies to invest more in educating their employees on how they could use Blockchain in business and how they are already using it.
Read Also: Top 9 Android App Development Frameworks to Keep an Eye on in 2022
Final Thoughts
Blockchain technology implementation is rising daily, so it’s time to start exploring how this revolutionary technology can benefit your business. There are many ways to begin using blockchain-based solutions, and the most important thing is that you’re highly focused and willing to experiment.
Ultimately, it’s essential to remember that Blockchain is still an emerging technology, and its full potential has yet to be discovered. The future is wide open, and the possibilities are endless.
Wondering where to hire blockchain developers? Contact us, and get your work done by highly experienced software developers. Hurry!
