Here, everyone.
Welcome back to the course.
So now we have gone through the blockchain integration considerations and we have seen some of the pain
points which help us to decide how we are going to integrate the blockchain services with the enterprise
solutions.
Apart from this, while we are defining the enterprise solution, you might also face security and implementation
issues.
And in this lecture we are going to go through the same.
So one of the issues which you might face while integrating and implementing blockchain solution is
about cost and efficiency.
The speed and effectiveness with which blockchain networks can execute peer to peer transactions comes
at a high aggregate cost, which is greater for some types of which is greater for some types of public
blockchains than others.
For example, in Bitcoin blockchain, if you are sending one bitcoin, you might need to pay 0.4 decimal
one BTC as a transaction fees associated with this.
Also the cost increases because we have multiple nodes operating the same task throughout the network.
Currently the total running cost associated with validating and sharing the transaction on the Bitcoin
public ledger has gone above $700 million per year and it keeps on rising each passing moment.
Moreover, if you are developing a private solution for an enterprise, you still need to take into
effect the cost and efficiency because you need to determine the total number of nodes which are going
to process and significantly provide the productivity enhancing solution for your enterprise needs.
So while you are employing blockchain, you can ask yourself following questions.
What is the business case for implementing a blockchain and how do we make it pay?
Moreover, you can also take the answers for the question that how can the cost and processing load
be shared among participants inside the organization?
And what are the main drivers of cost in our implementation of the blockchain?
These questions will help you answer some of the critical points related to the cost and efficiency
while employing blockchain with your enterprise solutions.
Another implementation issue is related to scalability.
Blockchain technology is currently facing the issue related to inability to serve many users.
For an enterprise solution, you might have a large number of customers and it is clear that scalability
is necessary for considering blockchain as a solution.
Blockchain needs to be dynamic to scale up and scale down as per the demand of the customers.
You can ask following questions while employing blockchain.
What is the throughput of the platform at maximum capacity?
How difficult is to spin up a node with the blockchain platform?
Or how many nodes would be required to provide optimal transaction speed with average load over the
application?
These questions will help you answer some of the critical points related to scalability regarding the
blockchain solution.
If you are taking up the solution from Bitcoin and Ethereum, you might not be able to reach the throughput
to the level of Visa or Mastercard.
Hyperledger and Corda Services might be able to provide you certain throughput which can be compared
to the Visa and Mastercard services.
Another issue faced by blockchain is regarding the insufficient knowledge.
This is a principal challenge associated with the blockchain as the lack of awareness of the technology
is very less outside the banking sector.
This is also hampering the investment and exploration of ideas with blockchain.
Most of the people take blockchain as bitcoin and cryptocurrency, but they don't realize that blockchain
has much more potential than the cryptocurrency, and cryptocurrency is a mere use case for the blockchain
technology.
Some of the industries, such as media and digital advertising, agriculture, chemical and politics
are still very away from the blockchain implementations.
You can ask following questions to tackle the insufficient knowledge that how do we increase our level
of understanding at all levels?
How do developers, management and customers learn about blockchain technology?
Is a blockchain right for my organization?
And if so, how are we thinking about applying it?
And what would this mean organizationally and culturally?
Apart from this, you can also ask what are my competitors and peers saying about blockchain?
And through that you can analyze that.
What kind of knowledge is required under your enterprise to work with blockchain?
Another issue which blockchain faced heavily regarding enterprise systems is related to transitioning
from legacy system.
Before blockchain entered the picture.
Most of the things which blockchain is targeting is already running smoothly.
Industries are well established with their legacy structures and they know the standards which they
want to follow within their organizations.
People in the organization are also familiar with the legacy system and they can easily provide maintenance
and upgradability for the solutions.
The problem is that for organizations to successfully adapt to the new technology, they will need to
put in place new structures to handle the new way of doing businesses.
This transitioning from legacy systems to a distributed system is quite heavy for enterprises as their
core services are already based upon the legacy systems.
You can ask yourself following questions to help in transitioning from legacy systems.
What additional benefits does blockchain provide?
You can also ask yourself how much time would it take to train or onboard people with an interest towards
blockchain?
Is blockchain helping us to remove redundant tasks or not?
All these questions will help you to analyze how you are going to transition from legacy systems.
Regulations and governance is another major issue with regarding blockchain.
Regulations have always struggled to keep up with the new technology advancement.
Bitcoin blockchain was created to bypass regulation completely and to tackle the inefficiencies in conventional
intermediated payment networks.
Blockchain was built to remove oversights, but on the other hand, without central organization, your
enterprise don't have a shock absorber in case of crisis.
Decentralized networks are much more resilient to shocks, which can impact participants directly unless
careful thought is given to their design.
So there is a tug of war between providing regulations and incorporating distributed systems.
You need to devise a solution that can work under regulation and governance and still provide a distributed
approach as an enterprise as you need to follow the regulations and governance to reach your end customers.
You can ask yourself the following questions How do current regulations impact our applications on blockchain?
How do we work with the regulator to bring our application to market?
You can also ask yourself what will regulators want to know about our blockchain application?
These questions will help you to tackle the regulations and governance and provide answers to some of
the critical queries related to how your blockchain applications are going to work with the government
regulations.
So that was about some of the common security and implementation issues regarding blockchain.
Make sure that you keep these issues in mind while you are developing your enterprise solution.
All these issues will factor into how you define your blockchain architecture.
In the next lecture, we are going to go through different risks associated with blockchain and we are
also going to learn the techniques to tackle those risks.
If you have any queries, feel free to contact us at info at the rate weblogs.com.