Making the move to blockchain can be a daunting prospect for business leaders, especially if you don’t yet fully understand the technology and how it could impact your organisation.
However, with some guidance, it’s possible to quickly develop a clear action plan for your company’s digital transformation.
Here are just some of the key considerations.
Finding a ‘use case’
The first question you should ask yourself is ‘do I need blockchain technology?’
Generally, your answer should be ‘yes’ if your organisation requires (or could benefit from) at least three of the following features:
- Data redundancy
- Information transparency
- Data immutability
- A consensus mechanism
- Contract enforcement
If at least three of these features are important to you, then the next step is deciding precisely what you want to achieve from blockchain implementation.
Developing a strategy
Once you’ve identified a potential use case for blockchain, it’s time to create a clear plan around how you’ll incorporate the technology into your business.
This is where you’ll need to consider exactly what results you’d like to achieve and how your business can be transformed with blockchain technology.
To introduce a successful strategy, it’s highly recommended that you work with experienced blockchain and digital transformation professionals.
For example, rewired.one focuses on providing knowledge-rich, highly relevant content and frameworks that can ensure blockchain technology is incorporated in a sustainable and inclusive way.
Selecting your blockchain
An important step in the process is choosing the right blockchain platform for your business.
This means identifying a chain that is best for your use case, which may mean more than one option may be available to you.
The key is ensuring you don’t become ‘vendor locked’ by irreversibly committing to a single platform.
Selecting a consensus protocol
A consensus protocol forms the backbone of your blockchain solution by providing a specific method for verifying transactions.
The different types of consensus protocols include:
- Proof of work
Proof of work is the original cryptocurrency consensus mechanism, which is used by Bitcoin. The system requires “miners” to verify transactions by competing to solve mathematical puzzles. The winner is selected to add the newest batch of data to the blockchain and is rewarded with bitcoin in return.
- Proof of stake
Proof of stake protocols work by selecting validators based on the quantity of their holdings in the associated cryptocurrency. This is done to avoid the computational cost involved with proof of work schemes. In 2022, Ethereum switched to a proof of stake system, joining the likes of Solana, Cardano and Polkadot.
- Delegated proof of stake (DPoS)
This mechanism is an evolution of the proof of stake concept, whereby users of the network vote and elect delegates to validate the next block.
- Proof of weight
Proof of weight is similar to proof of stake, but with a major difference. In proof of stake, the probability of discovering the next block depends on the amount of cryptocurrency that you lock in the network. Proof of weight, however, uses a different relatively weighted value, such as the amount of data stored.
- Proof of work
It is crucial to get expert advice, education and help to decide which one is right for your project.
Putting theory into practice
Once you have chosen a blockchain, it’s time to build, test and then run your blockchain solution.
Ultimately, this involves creating the first block of your own. This block should have all the characteristics of the chain and lay the foundation for the receiving information.
By now, your ‘token’ comes into the picture and it’s time to activate an application on the blockchain network.
Building an ecosystem
Once your blockchain solution has been created and is working well, it’s time for all stakeholders to get involved.
A strong ecosystem is built by ensuring those stakeholders agree on issues such as the terms of engagement and the mechanisms of governance.
Blockchain technology with its decentralized apps can democratize how business is conducted by fostering both trust and flexibility.
The blockchain world is constantly changing so it is important to be ready to adapt.
Rewired.one will be by your side to respond to any new regulation or event that could affect the way your business operates.
It is important to find out whether blockchain is a fit for your organization. Request to book a free blockchain discovery session now, where you’ll learn what it will take for you to build the future with blockchain.
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