This is a blog post by one of our eminent contributors, Mr. Rajesh Dhuddu.

During myriad conversations with global CXOs, I realized that many of them are not fully confident about internalizing Blockchain. Through chain of articles, I am making an attempt to identify common misbeliefs and traps so that decision makers can disregard them completely, while considering Blockchain for their respective businesses.

Trap No 1 – Blockchain is all about crypto-currencies particularly Bitcoin or Ether. We cannot internalize crypto-currencies in our businesses!

This common belief is incorrect. Blockchain has several versions – Public – permissionless:- the most known examples are Bitcoin & Ethereum networks where everyone (nodes) have equal rights to transaction creation & validation, data access & producing new blocks.

Public – Permissioned :- works exactly like previous one, except that parties joining Blockchain network will need prior permission to join.

Private – Permissioned :- These are most relevant for enterprise applications with respect to privacy. Everyone(node) is pre-selected & validated. These are usually implemented in a consortium model & used for business collaborative requirements. There are no cryptocurrencies. Hence, mining is irrelevant here.

Trap No 2 – Blockchain (BC) is emerging tech, it’s cool! Let us implement for tech sake!!

Some companies approach Blockchain purely from fascination towards technology. This is a recipe for failure. Blockchain implementations should be led by business outcomes. Licensed software industry kind of conditioned people to focus purely on tech. As software / platform companies need to maintain healthy revenue streams, they have devised the business model of progressing from previous version to next one; very often in a forcible way through ‘end of support’. As a result everyone gets fixated on more technical features.

Blockchain implementations both Public & Private are and will be successful when they are implemented to – 1. Provide completely new experience to end customers 2. Meet unfulfilled or under serviced needs 3. Accomplish complete or partial dis-intermediation 4. Reduce trust gap by digitizing trust and preserve provenance of an activity or material. These four attributes can address zillion problems that exist today in any form of interaction – B2B, B2C, P2P, Machine 2 Peer, Machine 2 Machine.

Also there is a tendency to dismiss Private Blockchain as a flat file or a database that is nothing but old tech. Public Blockchain also uses components like C++ (for Bitcoin,invented in 1985), Asymmetric encryption (invented in 1976), Proof of Work (invented in 1993) & SHA 256 (invented in 2001). Pertinent point is when these different technologies were assembled together it ended up solving the double counting problem in money applications through invention of Bitcoin in 2008. Computer scientists struggled to solve this problem from early 1980s.

Likewise, Private Blockchain should be used to solve tough business problems, only when other technologies fail or are sub-optimal. Else, Blockchain initiatives will fail and people get into the,’ I don’t need Blockchain, holy trap’.