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Behind only AI, blockchain is the second-nearly-hyped developer technology. There are a few good reasons to use information technology in a project, but plenty of bad ones too. Whether blockchain technology is right for your application is ultimately up to you, merely we'll take you through some of the basics on whether information technology is worth serious consideration.

Blockchain Stripped Bare

It is far likewise easy to confuse blockchain technology with cryptocurrency and especially Bitcoin. Blockchains are actually much more full general, with many other applications. In particular, blockchains practise not demand to involve currency. They also don't have to involve mining, or trusting countless anonymous individuals to secure the system. In fact, the bulk of enterprise-grade blockchain projects involve entirely unlike models of trust, and many don't require any notion of a currency. So that begs the question: What does blockchain itself actually get y'all?

A Distributed Database

If you're happy with your database solution at present, there probably isn't whatever reason to throw information technology out and move to blockchain. The switch involves rethinking everything, recoding most things, and betting on a new engineering that volition demand many years of work to become equally mature as whatever database you're currently using.

However, if you are constrained by your database architecture, then moving to the distributed database (ledger) you become by using blockchain can have some major advantages. Everyone sees the same thing from everywhere, for starters. And anyone can add to the ledger in a verifiable way. So if you lot accept lots of business partners who need to be able to transact with each other without you being a bottleneck, then blockchain may provide a solution. An instance of this is the endeavour Maersk and IBM take announced to develop a private-blockchain-based solution for the entire supply chain that makes up the shipping industry. If it was simply Maersk keeping track of its relationships, information technology could apply a traditional database information technology controls. Only if the system is to work for all its partners, then the information store needs to adjust contributions from many different entities. Blockchain is perfect for that.

An Culling to Having a Gatekeeper

You tin, of course, implement a system that allows lots of participants using traditional data direction tools if you have a Gatekeeper who anybody trusts. That's how many financial markets and banks work. Only that Gatekeeper adds a lot of overhead and expense. For case, startup DMarket allows gamers to buy and sell their in-game avails well-nigh friction-free. That means more of the money can stay in their pockets instead of going to Steam or whichever platform would otherwise have been the Gatekeeper. Farther, a game publisher can set a system where it gets a portion of any aftermarket sales, helping finance the cost of game development.

Do Yous Need Smarter Transactions?

Sample of the workflow for a smart contract on a blockchainTraditional databases are bully at simple transactions between parties. But if you want to legislate the longer-term behavior of assets in a transparent manner, blockchains take begun to enable something called Smart Contracts. Smart Contracts are pieces of lawmaking that make up one's mind the mode a particular transaction unfolds. For example, they can exist written to include a Deposit upon order placement, an Escrow where the eolith is placed, a Proof of completion of the task or delivery of the product, and a final Payment. These contracts tin can even persist beyond a unmarried transaction, and affect the time to come behavior of, and payment stream for, assets. For example, if blockchain was used for selling concert tickets, the Smart Contracts used could be written then that the artist received a portion of any aftermarket sales at scalper prices.

Smart Contracts are incredibly powerful, but they are in the early on stages of development, and not for the faint of heart. You literally put your assets and business transactions nether the control of a bunch of code. Recently, $300M of Ethereum was at least temporarily and perhaps permanently destroyed by accident when a novice programmer stumbled across a problems in the Ethereum Smart Contract implementation and panicked. In a private blockchain system, there would probably be a simpler way to undo the damage, but the diversity of things that can go wrong may give developers pause.

Do You Need Your Own Currency?

Bitcoin is the most famous crytocurrency, but now there are over 2000. Should you create another?It is admittedly non essential to accept a currency to make apply of blockchain, any more than y'all take to invent your own coinage to start a banking company. Simply in many cases at that place are good reasons for one. In particular, since you're probably non a bank, just want to allow people to transact — perhaps internationally — then having your own currency may make that easier. For instance, Ripple, which is aiming to revolutionize the international transfer of money, provides an optional currency, XRP, to its partners. XRP has the advantage (then far) of being easy to buy and sell beyond borders. Then financial institutions or stop users tin can trade out into their local currency as needed.

And then if you do need your own arrangement of tokens (which is actually what cryptocurrencies are), then blockchain has many of the tools needed to create them (mining using proof of piece of work being the virtually crude and ultimately cocky-defeating). Tokens are also a fashion to provide stakeholders with a share of the success of your system if that's appropriate. Through Initial Coin Offerings (ICOs), they can also be a manner to fund a projection — although they are probably mis-used as often every bit they are used responsibly.

One recent example that has come up in for a lot of criticism is the planned KodakCoin. It is intended to be a token that can be used to license photographs, stapled to a blockchain implementation of licensing and payment. Now, the thought of validating photo licenses using a blockchain is certainly interesting, although not also many seem to be excited about this particular implementation. Merely adding a cryptocurrency to it simply makes life more difficult for everyone. Except perhaps for Kodak, which is hoping to raise as much every bit $20M from selling the initial tokens in an ICO. Amusingly, the tokens can only be sold to accredited investors (people with money) since they are a speculative security. That will make them even less useful for the licensing of photographs.

A counter case, of which there are plenty, is Siacoin, a distributed storage solution. It has ane of the easiest coins to sympathize. Y'all earn them by letting people use your spare storage, and you spend them to shop data on other people's storage. The visitor behind it, Nebulous, takes a transaction fee for providing the secure service. Nebulous has separated fundraising into a unlike coin, Siafunds. These are merely sold to accredited investors. That's okay because they are strictly a fundraising vehicle, which confers a correct to a piece of the transaction fees earned on the Sia network. Whether or not the effort will be successful, it at least represents a adequately clean way to interruption autonomously tokens and funding into understandable chunks.

Consider Proceeding in Parallel

Having spoken with a few dozen blockchain-based startups and similar efforts within larger companies, if you practice make up one's mind to launch a project to blockchain-enable your application, I'd propose doing it in careful stages with plenty of prototyping and iteration. Once at that place are real users of a blockchain system, and real value is stored in it, fixes get time-consuming and expensive. Hopefully, you tin can exercise this in parallel with continuing development on your existing systems, in case blockchain doesn't work out or the effort takes longer than you think.