First, let’s discuss what blockchain is and why businesses need it before looking at the step-by-step implementation of blockchain in business. Blockchain is a distributed database that is stored on computers that are connected to each other through the Internet. It differs from a conventional database in the way that its data is decentralized and grouped into blocks. Once a block has been filled with information, it is sealed and linked to another block, forming a chain. The information is stored in digital form and remains unchanged. The immutability and irreversibility of the blockchain makes it unique. This is ensured by the cryptographic protection system. It is almost impossible to manipulate the registry.
Safety is one of the reasons why companies are turning to enterprise blockchain as a means of ensuring their data security. Companies are investing in enterprise blockchain platforms to improve their business model. This is achieved by focusing on the specifics of the business and the industry-specific challenges.
Large corporations, government agencies, and non-profit organizations dealing with sensitive information require a secure channel for storing and processing documents. Therefore, private enterprise blockchain solutions are becoming increasingly popular.
A growing number of new applications for the technology are being discussed, including trade reporting, cashless payments, checks and payments, accounting, risk management, auditing, management accounting, and financial accounting. Blockchain solutions are gaining great popularity in the fintech industry, banking and other areas related to finance.
How Can You Get Benefit from Blockchain Technologies?
Business can benefit from blockchain technologies in the following ways:
- By providing stakeholders with reliable data, blockchain solutions enhance trust between business partners
- By integrating data into a single system, these technologies eliminate data fragmentation
- By protecting the system at a high level. And you may also checkout Fundamental Analysis of Bitcoin.
- By eliminating third-party intermediaries, time and money can be saved
- By tracking all supply chains, providing a guarantee of authenticity and integrity for products in commercial circulation.
Blockchain implementation process
Blockchain implementation is a labor-intensive and challenging process. You should carefully analyze all the pros and cons of a blockchain implementation idea. Consider if it is necessary for your business. If the answer is yes, let’s examine the steps required to implement the idea and consider a small integration guide.
1. Identify problems and needs
Don’t rush. Examine how blockchain solutions can benefit your industry by identifying your company’s problems and needs. Be realistic about your goals. It is important that you and your team are confident that these goals can be achieved.
For this initiative to be successful, you will need to prepare your employees for change. Training is necessary if members of your organization do not have sufficient knowledge of blockchain.
Start with a pilot project and analyze the results. This will reduce the likelihood of failure in the full-scale project. And you may also checkout Decentralization and blockchain: Explained.
2. Choose a blockchain platform
Platforms come in a variety of formats. Here are a few examples of some of the more popular platforms:
- Ethereum: This is not only a blockchain, but also a protocol that runs many DApps as well as independent blockchains. Ethereum is the first decentralized blockchain platform to offer smart contract functionality. Its Ethereum (ETH) token currently has the second largest market cap among cryptocurrencies after bitcoin.
- Cardano: one of the world’s fastest blockchains. Cardano has the second largest market cap among Proof-of-Stake (PoS) blockchains.
- Corda: Corda does not have its own cryptocurrency, does not use the concept of mining or a proof-of-work system, and data exchange takes place only between participants in the transaction. There is no global broadcast to all network nodes. Participants reach consensus at the level of the individual agreement/contract, not at the level of the entire system.
- Stellar: This is a decentralized system that can be used to exchange any type of value. According to the developers, their blockchain is more like cash than crypto: Stellar is much faster, cheaper, and more energy efficient than typical blockchain-based systems.
3. Choose a Protocol
A blockchain protocol is a set of rules and actions used to transfer data between blockchains. It ensures the security of transactions within the blockchain network. The consensus algorithm verifies the correctness of certain rules, i.e. it checks if the transaction and the protocol are followed. It is important to choose an appropriate consensus protocol. Some examples of protocols are listed below:
- The Proof-of-Work algorithm is the foundation of bitcoin consensus. To participate in the transaction, network members must solve a mathematical puzzle to find the hash and publicly verify their work. Those lucky enough to find the correct solution are given the opportunity to add a block to the chain and receive a reward for their work.
- The Proof-of-Stake protocol was developed as an alternative to Proof-of-Work to overcome disadvantages such as high power consumption. As a result of this mechanism, the amount of computation required to validate blocks and transactions on the blockchain is reduced. By replacing block verification with staking, the network randomly selects a validator.
Coin owners offer their coins as collateral for the ability to validate blocks and become validators. Validators verify that the transactions in the block are correct. If they are correct, they receive a reward for adding the block to the blockchain. Validators who suggest adding invalid blocks lose a portion of their staking assets as a penalty. And you may also checkout Key Features of Geolocation Applications.
In Delegated Proof-of-Stake, the voting and delegation mechanism is included to encourage users to secure the network and validate blocks with pledged coins. By pledging, users are given the opportunity to participate in voting, which elects delegates who are responsible for all aspects of completing transactions. The delegates must agree on which transactions to reject and which to approve.
4. Developing and testing blockchain solutions
When developing blockchain solutions, it is crucial to consider the quality of the technology that will provide security, the infrastructure, and how the technology will integrate with other platforms and blockchains.
Blockchain testing consists of many components and activities that require special attention and specific testing tools. This is important to ensure that bugs in the decentralized blockchain are fixed. Testing will help reduce the risk of adding new applications by integrating them easily and quickly.
