Best Practices for Blockchain Projects What is a blockchain roadmap for?
Nearly three billion US dollars in new business value is expected to be generated by blockchain technologies by 2030. How can companies participate in this? How can a blockchain project be initiated in a targeted manner? And what pitfalls are worth paying attention to?
A blockchain project must be prepared in detail and carried out systematically.
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The mainstream acceptance of the blockchain is imminent. Companies are now securing important market shares with the right blockchain roadmap strategy to secure their existence in digitization. For this, the project team must first be aware of the distributed nature of the network.
As a result, participants in a blockchain network can not only be spatially separated, but scattered all over the world. Each participant is responsible for the operation of a full node and takes care of a complete copy of a ledger for updating with new transactions.
An important feature that influences a blockchain roadmap is decentralization. The nodes in the distributed network use a specific consensus mechanism for maintaining the network information, as well as the rules for the operation of the entire network.
The element of decentralization is absolutely necessary in a blockchain network; only in this way can it be ensured that a certain entity cannot control all systems or information or define the rules for transactions in the network.
For this reason, the “cooperation” factor is an important point for a blockchain roadmap strategy. The resulting cooperation depends on common, valid data from all network participants. This means that knowledge and skills in the field of network fundamentals, data management, change management, governance, security and data protection, application integration and maintenance are required.
Milestones of a Blockchain Roadmap
A roadmap should provide a clear overview of the individual steps and measures required for the implementation of a blockchain. Some of the most important steps are listed below:
Development of a use case
The first step in a blockchain roadmap example is to show the development of a use case. Here, the project team has to ask a central question: Which technical problem can the blockchain solve better than with another technology?
To do this, the team must know all the relevant processes in detail and identify the problems associated with them. If these processes do not fit a blockchain, it must be checked whether it is worthwhile to revise these processes in order to create the necessary basis for the technology.
The qualification of a blockchain for operational processes can briefly outline the following small checklist: Is data shared and updated by several parties? Is there a verification obligation? Are there intermediaries that contribute to complexity? Are the interactions to be carried out time-critical? Do the transactions interact with each other?
If the project team answers yes to four out of six of these questions, a blockchain could be an interesting approach for the company. Following this, possible use cases should be described. On the basis of so-called “use case evaluation frameworks” it is possible to identify the best use case.
Create Proof of Concept (POC)
The development of a proof of concept is a feasibility study that examines the question of whether the blockchain implementation of the respective organization is even feasible. In addition, a PoC within the blockchain roadmap should provide a good overview of the planned project.
With regard to the challenges to be derived, the following questions arise: Which business problem can be solved by the blockchain implementation? What other positive business results (sales, profit shares, contribution margins, etc.) should be achieved? What contribution does the blockchain make to advancing the digitization of the company?
Defining the architecture
There are a number of blockchain types and platforms. The individual types are differentiated, for example, by whether they are public (open to all), private (closed circle of participants) or hybrid (mixed form) or equipped with or without permission (possible accesses).
For example, Hyperledger Fabric, Corda, Stellar, open chain, multichain, Quorum, Ethereum can be mentioned as blockchain platforms. The selection of the appropriate blockchain depends on the respective industry and the specific business model.
Furthermore, a suitable consensus protocol must be selected. That is, various algorithmic methods are available for the verification of a transaction. These include, for example, Proof of Work, proof of stake or delegated proof of stake. They differ, among other things, in terms of speed, mining costs, power consumption, scalability, etc.
Scaling of the Proof of Concept (POC)
An important point to consider when implementing a blockchain technology is scalability. Because the following factors have to be taken into account that affect scalability: limitations of the blockchain network and hardware, increasing transaction fees and the block size together with the transaction completion times. The main conflict is between maintaining the typical advantages of the blockchain and at the same time ensuring the greatest possible flexibility at high speeds.
Another important aspect of a blockchain roadmap is the specialists who should accompany a successful implementation. Each employee should have a background in cryptography, smart contracts or the functioning of decentralized peer-to-peer networks. Of course, a competent team also includes leading experts such as a Chief Strategy Officer and a Chief Information Officer.