Chapter 2. Identifying When to Use Blockchain

In this chapter we look at when to use blockchain as a solution. We saw in Chapter 1 that blockchain is a shared, distributed, and permissioned ledger that records transactions across a business network. There are some specific requirements of a scenario that make it particularly suited to using blockchain, and we will explore those in this chapter.

First, we’ll identify the types of issues business networks are facing, before looking at the criteria we use to determine whether blockchain makes a good technology fit to solve those issues.

Identifying Issues in the Business Network

It is important to have a clear idea of the scenario’s requirements, and to know which issues you are trying to solve. This might seem obvious, but with any new technology—and particularly a well-hyped one—there is often a temptation to jump to an implementation without a lot of thought about the problems it aims to solve.

Businesses act for several reasons. Most commonly, they are going after a new market (for example, opening trade finance opportunities to small/medium enterprises), or trying to remove cost or inefficiencies from a business process (for example, removing intermediaries). Identifying the issues and expressing them in terms of the expected gain (or return on investment) is the first step to a successful project.

Let’s return to IBM’s Global Financing blockchain solution introduced in Chapter 1. They identified that within this business network ...

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