Given the controversial nature of Blockchain, many a business analyst is understandably perplexed by this runaway technology. This decade-old train has long left its cryptocurrency embarkation station and is now rounding the curve towards gaining mainstream acceptance. Now is the time for you to climb aboard this free-wheeling train and right its journey through your organization.
Initially, your inquisitive BA side will certainly lead you down: document, market, and vendor analysis tracks as you learn more about this somewhat mystical and often misunderstood technology. In a nutshell, blockchain is “a distributed and immutable record of digital events, which is shared peer to peer between networked database systems that utilize cryptographic and security technologies.” As part of your research, you will certainly grapple with such concepts as immutability, disintermediation, and cryptographic hashing.
But don’t get railroaded! At its core, blockchain is simply a distributed ledger system that securely processes transactions that are maintained for posterity. Picture a ledger as a living spreadsheet with each chronological transaction being added as row within a record’s tab. A group of digitally signed transactions form a block that is linked to a related, preceding block via a practice called cryptographic hashing. As a result, an immutable and uninterrupted blockchain of encrypted data is formed and made available to all within a disintermediating network - one without a central, intermediary system being in control.
As led by a conductor-less locomotive engine, this blockchain train faces the risk of becoming derailed at critical junctions that lack signals for direction. In the rush to the light at the end of the tunnel, corporations and government agencies are seeking to solve business problems via fast-tracked pilot and proofs of concept initiatives. To date, thousands of blockchain trials are barreling down unstable tracks that are not bolstered by technology standards, industry consensus, nor essential regulations.
As such, per the research and advisory Gartner organization, few if any blockchain deployments have reached a productionalized state within these sectors. Still, leading technologists advocate joining this captivating and bounding train as it ventures through all sorts of learning curves. Yet, don’t head down the same tracks as these energetic and well-meaning blockchain technologists who have eagerly trialed blockchain solutions. In so doing, many have employed the equivalent of a railroad tie hammer in search of a needed spike.
Instead, by leveraging your interface analysis skills, you will soon learn that blockchain nodes (e.g., servers, desktops) are akin to train stations distributed across the landscape. Depending on their roles, they are involved in transmitting, verifying, validating, and maintaining data within the decentralized network.
Further, the train’s jouncing cars are best compared to key blockchain design components – representing a set of technologies that are often misunderstood. Each technology is striving to right themselves towards maturity to support the stability of the blockchain:
- Security Access: Utilizes identity access management practices to grant rights to only those nodes that are known and trusted.
- Cryptography: Protects records by use of the above hash functionality, private keys serving as digital signatures, and encryption practices.
- Provenance: Instills an audit trail, as achieved by the chaining of records.
- Smart Contract: Incorporates business rules that are automatically run to verify a transaction’s correctness.
- Consensus: Validates the formed blocks, per agreed-upon proofing algorithms, before committing to the ledger.
By training your focus on these nuts and bolts features, you can best rely on your change agent talents to promote interest in blockchain within your organization.
Befitting your cautious yet ambitious mindset, step back from this fervor and assess the value proposition that blockchain holds. Take a look at your current transaction-based networks (oftentimes structured with a centralized, controlling hub) and ask yourself:
- Is the quantity of interdependent, transaction-based records large, and does this volume require high-performance processing? (i.e., distributed ledger)
- Can data be equally shared in a network among a sizeable number of partners – rather than maintained by a centralized resource? (i.e., decentralization, consensus)
- Must data be limited to participants due to security or privacy reasons?
- Are extensive regulation-based and audit-related activities frequently performed to ensure correctness, immutability, and traceability? (i.e., engrained auditability)
- Does data require processing via complex or regulation-based rules? (i.e., smart contract)
- Is the current network vulnerable to fraud or cyber-attack? (i.e., cryptography)
- Are network participants willing to share data and the associated processing activities?
If you can answer “yes” to a majority of these questions, then proceed by identifying business use cases. Candidates that are gaining blockchain steam include: supply chain management, identify management, contract management, financial record reconciliation, records management, and case management.
Further, your creative mind will likely spark even more use cases to explore.
So, embrace your evolving blockchain evangelist role and pitch your well-thought-out recommendations to your leaders, teams, and even external partners. Enlighten them about blockchain’s potential to transform the way organizations do business and delight their customers.
Better to climb aboard now and get your organization’s gears going, then missing the train all together as it nears a destination of widespread, mainstream adoption next decade. And if you are ready to embark on this incredible journey or even pilot it, then it's full steam ahead!