4 Questions to Determine if You Need Blockchain in Your Solution
While blockchain is currently the hottest topic in tech, there is still a lot of confusion surrounding the technology. How can you implement a business process that is so new that most people don’t really understand what it does or how it does it?
There is no doubt that blockchain will be as common in the future as the Internet of Things and smart devices are right now. The question is, should you invest the time and money to build it into your application sooner rather than later?
Here are a few questions to ask yourself if you’re considering adding blockchain to your solution.
1. What type of database is best for your application?
If your application requires a database, you probably want to go ahead and lay the groundwork for the distributed ledger capability that blockchain development offers.
There are many advantages to having a distributed database. Transparency and honesty in business transactions is becoming increasingly important to both consumers and businesses alike, so whether your solution is B2C, B2B, or a combination of both, the more access your customers have to tracking their transactions, the more trust you will gain as a company.
If your product or solution is targeted towards an industry that transfers a ton of data each day – such as logistics, supply chain, or retail – then adding blockchain is also a good idea. Blockchain allows each key player along the supply chain to add specific transactional data so that other involved parties can get real-time information and notifications. This prevents bottlenecks and miscommunications that can delay deliveries and frustrate customers.
2. Do you want to implement smart contracts?
A smart contract is similar to a regular business contract between two parties, except for the fact that it is fully digital and managed by a computer program. Smart contracts through blockchain allow two parties to work directly with each other without the need for third-party involvement, such as an attorney, bank, or government entity.
Because the terms of the contract are accessed and implemented through the blockchain, every step of an agreement is verified and no payments or services are provided until pre-conditions or completion of certain parts of the project are met. Smart contracts go way beyond “good faith” agreements and offer a higher level of trust as the blockchain adds transparency while removing risks to both parties.
If your company or product requires contracts – especially if a high number of people at different levels in an organization are involved – then adding blockchain to your solution is a must.
3. Could your organization benefit from its own currency?
There are industry people on both sides of the argument as to whether or not cryptocurrency will replace cash in the future. Using Bitcoin or other types of digital currency will certainly be safer than paying with credit cards or using bank transfer information online, as both of the latter methods are highly susceptible to hackers.
If your solution is going to be utilized worldwide, accepting Bitcoin or creating your own cryptocurrency could make it easier for you to accept payment from other countries.
While cryptocurrency is still in its infant stages, planning now for the usage and acceptance of online currency and building blockchain capability into your current solution could put you way ahead of your competitors in the years to come.
4. Are your customers going to expect it in the future?
Think about your target audience. Depending on what type of solution you are developing, your user group should be able to tell you whether or not you should include blockchain.
For example, if you are developing a next-generation virtual or augmented reality gaming environment targeted at millennials and younger generations, then yes, they will probably expect to be able to buy upgrades and add-ons through the use of cryptocurrency. Blockchain and Bitcoin to the next generation will be similar to what debit and credit cards were a few decades ago, or what Apple Pay and Google Pay are right now.
Another thing to consider is the level of security your target audience will expect. If you’re designing a solution for the government or medical industry, then blockchain would be a smart addition, as these industries are growing more and more concerned with securing sensitive data and information.
If you’re building a new application or solution from scratch, you certainly don’t have to include full blockchain capability to start, as that can be quite expensive and complicated given the fact that it’s such a new technology. However, you can certainly build a framework that will allow you to add blockchain in incremental stages as it becomes more mature.
The smartest thing you can do as a startup or entrepreneur is stay on top of this developing technology and learn all the ways it will be able to enhance your business in the future. Careful planning for and understanding of blockchain will put you way ahead of your competition.