How to identify in five steps the opportunities that can arise from blockchain technology
Lately, even in Italy blockchain investments are growing, according to the European and global trend, and not only in the pharmaceutical sector that we know very well; the study of Cefriel and IBM “the opportunities of blockchain beyond the financial sector” confirms that more and more companies of the helthcare, banking, real estate and assurance sector invest in blockchain, to make processes more secure and integrated.
It becomes important avoiding wrong investments and understand the value of this technology in terms of real opportunities for our company, starting from a careful preliminary phase of study and analysis; a few questions to identify the business processes to which blockchain application could become the drive for innovation and an important advantage towards the Industry 4.0.
Let’s start asking some questions:
- Who can see or modify our data?
If, for example, our business needs the commitments of more players in a process and one of its main critical issue is the lack of mutual trust, blockchain could guarantee advantages in terms of communication, control, automation, integration and scalability to all players. On the other hand, where the co-presence of several players is not foreseen, more useful ad hoc technologies might be preferred to blockchain.
- Who is the owner of our data? Are there intermediaries?
We need to exclude intermediaries from a process: in this case blockchain could be the most suitable and advantageous solution. Trust, initially a prerogative of third parties responsible for recording and coordinating data, with blockchain would be shared between the participants of the network and guaranteed by the technology itself. In fact, Blockchain ensures the uniqueness and immutability of data, but attention, not the truthfulness, as we will see in the next question.
- Do we have a quality system or defined procedures?
A quality system and well-defined procedures creates the ideal context for blockchain application. Take for example the pharmaceutical sector, where there is a high governance that means that data written in blockchain are already reliable: in this case the platform becomes a further guarantee of their reliability. Obviously, when defining the project architecture in a highly regulated context it will be necessary to keep in mind the reference standards and any constraints.
On the other hands, if data are not correct or if there are doubts about its truthfulness, blockchain technology does not add any value as it does not ensure the data authenticity.
- Which has more value: the content of the data or the track of its transfers?
When the value of a process is in the trace of the data transfers rather than by data itself, blockchain finds its best application. Blockchain was first conceptualized as a shared transaction log for an asset: we could therefore define it as a digital, decentralized and distributed version of the original ledger.
If the main need is in data storage, it might be more effective to study hybrid solutions, in which only transactions and some parts of data are managed via blockchain, while the content of the data is managed with traditional database.
- An unalterable trace of the entire data history can be an advantage for our business?
To guarantee an unalterable traceability, blockchain stores each data change in a non-erasable way. Business areas in which it is important the data history, or the evolution of data, are those in which blockchain guarantees the better results. If the business requires to delete the data history by design (for example with overwrites) the application of blockchain can instead be more complex and less effective: in this case it will be necessary to study architectures that preserve the trace, but not the data content.
We have come to the end of a first self-assessment by answering five simple questions: in several cases blockchain seems the best solution, while some answers could generate doubts. Dealing with a versatile technology, we suggest the evaluation of pros and cons, even in contexts apparently unsuitable for the blockchain application. It could be the way to discover interesting ideas or different areas to which this technology could generate value for your company.
For those who want to understand better what is blockchain and its main applications: on June the 7th we will talk about “opportunities offered by new technologies 4.0” at the 59° Simposio AFI in Rimini, with a specific focus on pharmaceutical industry. Download the program and subscribe to the event.