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The #Blockchain Question | @CloudExpo #FinTech #AI #DX #MachineLearning
One of the challenges is determining, ‘when should I be thinking about blockchain?’

The Burning Blockchain Question - Should I Be Thinking About It?

Shiny new toy syndrome. We all see it, we all experience it. Who doesn't like the shiny new toy?  Whenever a new technology hits the high points of hype, everyone starts talking about it like it will solve all their business problems. Sadly, frequently without even looking at what problem they are trying to solve. Blockchain is one of those technologies. According to Gartner's latest report on the hype cycle of emerging technologies, blockchain has just passed the peak of their hype cycle curve. If you read the news articles about it, one would think it has taken over the technology world. The reality is, as Gartner put it, that ‘most initiatives are still in the alpha or beta stages' and ‘Enterprises are still deciding how to navigate this technology.'

One of the challenges is determining, ‘when should I be thinking about blockchain?' It's a question I get asked frequently, both from the business and from technologists as well. I have heard comments as far ranged as ‘I have no use for blockchain as my business has nothing to do with bitcoin' (a common misperception I wrote about a while back Blockchain - Why its so much more than bitcoin) to ‘I want to use blockchain to replace all my database systems' (a definite case of shiny new toy reaction).The reality is, as is usually the case, somewhere in between the extremities. Let's talk about some of the things that might be reasons to think about blockchain as potential tool to help solve a business challenge.

Chain of custody
This is one of my favorite concepts when talking about blockchain. Anyone who has ever watched a police procedural understands the basic concept of chain of custody. If I have a piece of evidence, I need to ensure I can document the entire chain of people/places where that evidence has changed hands. For it to be valid evidence in court, that chain can not be broken. There can be no gap, or gray area, as to who had control at any point in time. This parallels quite nicely into the business world. You have assets, whether they be physical or digital in nature. You need to be able to adequately and reliably track those assets. If that chain of custody is important to the business, and you have had challenges being able to track that chain of custody, then blockchain may be an option. Let take a look at a couple of examples.

  • Mortgages: We are all familiar with mortgages. Banks buy and sell mortgages to each other all the time. Some of you may remember a little problem with mortgages and the economy back in 2009? One of the many problems that occurred was that some banks were selling the same mortgage to multiple other banks. Suddenly home owners had multiple banks and mortgage companies claiming ownership of their mortgage and demanding payment (I had several friends live that problem). The challenge was forensically tracking down who was the true owner of the mortgage. Chain of custody, pure and simple. There is a great blog that discusses how blockchain might have helped in that situation here.
  • Supply Chain: Ultimately, if you think about it, supply chain is all about chain of custody. I have product that originates at its point of .creation. That product moves through various channels, handled by various entities, until it reaches its destination or consumer. For any industry, knowing where that product has been, where it currently is, and where it is going is crucial, and can be a challenge. Some recent examples across industries looking at blockchain as a solution include:

Chain of events
Chain of events is similar to chain of custody and could overlap (such as in supply chain, which as well as tracking the asset, is tracking events that occur with the asset during its lifetime). I call it out separately as there are other business scenarios specific to this concept. Chain of events is exactly like it sounds, tracking a series of events where it is important to know when the events occurred, and have a trusted way of verifying the event and where it occurred in the sequence of events. For example:

  • Coursework and transcripts: There has been a lot of discussion and investigation into using blockchain to help maintain and track course work, ultimately providing the information in college transcripts. University of Texas recently did a fascinating POC in that space
  • Electronic Health Records: Probably the best example of a chain of events. Your health care is a series of events, treatments, medications, tests, etc., that are sourced from many locations. Having a way of ensuring the valid sequence of those events is a critical part of your health care. I recently wrote about how that industry is looking to blockchain as a possible way of solving the challenge.

Trust and Multiple parties
Inherent in both of the discussions above is that there are always multiple parties involved, and, due to that fact, being able to trust the information is key to the success of the system. Invariably in most systems today, all the parties have their own copy of information, whether it's a transaction, an asset, or an event. Duplication of information, discrepancy in the information, causes significant time, resources, and money being spent on reconciling and re-confirming the information.

  • This challenge is well known in the financial services world, which is why there are third-party clearing houses whose sole purpose is to validate and reconcile business transactions, providing that extra level of trust needed between parties. This is probably the most well-known and understood use case in the blockchain space. (and why many third-party clearing houses are spending a lot of time and energy on investigating blockchain)
  • I recently had a conversation with someone in the specialty pharmacy space. One of the challenges they have is that multiple entities are involved in tracking the events that occur with a customer. The simple example they gave me was verifying health insurance. Throughout the process, as each business entity processes the flow for the customer, a check is done with the health insurance for coverage. Even if that check has been done previously, it's done again, because that check was done by someone else. This is time-consuming and costly. They are looking at blockchain as a way of possibly dealing with that rework and trust issue. This falls both into the supply chain as well as the EHR both discussed above.

Technology is the vehicle, not the destination
Those of you who know me, know one of my favorite mantra's is ‘Technology is the vehicle, not the destination, figure out where you want to go first, then choose the vehicle that will get you there.' Blockchain is a fascinating technology that could potentially have transformative impact on a variety of industries. That being said, it's still just a vehicle, just a tool. When to use it should be based on business needs and goals. The scenarios I described don't mean ‘If this happens you should use blockchain.' They are meant to be guidelines as to when you might want to be considering blockchain as the possible vehicle. As technologists, it's our responsibility to help the business understand what vehicles and tools are available, and what the tradeoffs involved are. I am thankful to have blockchain as one of those tools and options available to me. Where it goes is still up in the air, and time will tell if it is transformational or not.

About Ed Featherston
Ed Featherston is VP, Principal Architect at Cloud Technology Partners. He brings 35 years of technology experience in designing, building, and implementing large complex solutions. He has significant expertise in systems integration, Internet/intranet, and cloud technologies. He has delivered projects in various industries, including financial services, pharmacy, government and retail.

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Cloud Expo on Ulitzer
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