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How to make the case for blockchain: 5 steps
Do you see a potentially valuable blockchain use case for your organization? Here's how to push past the hype and win organizational support and resources
If you’re soliciting support for an early blockchain pilot test or project in your organization, you’ll need to explain both the underlying technology and how it can help the business.
That’s true for any emerging technology, but this pair of tasks could be particularly tricky for IT leaders who want do a blockchain project. For starters, blockchain is tough to explain and understand, especially for non-technical people. Moreover, the hype surrounding Bitcoin and other cryptocurrencies tends to create some misconceptions about the fundamental blockchain tech behind those digital currencies.
[ Can you explain blockchain to non-techies? Read our related story, How to explain blockchain in plain English. ]
We’re still in the very early days in terms of corporate blockchain adoption. Companies and industries such as finance and healthcare are experimenting, sure, and there are some promising use cases. But there are also good reasons to not implement blockchain, such as when a traditional database will serve your requirements just as well.
So, if you think there’s a potentially valuable use case for your company, some evangelism will be necessary to get the proper resources and organizational support. What’s the right approach? It’ll be organization-specific, but making a convincing case for a blockchain project has some common denominators. Consider these five strategies:
1. Blockchain is not Bitcoin
For starters, completely separate blockchain from Bitcoin and other digital currencies.
“The key is to divorce the innovation of blockchain and its value to enterprise from the headlines people may have seen about Bitcoin speculation or cryptocurrency scams,” says Wes Levitt, head of strategy at Theta Labs, makers of a decentralized, blockchain-powered video delivery network, Theta Token.
Many major corporations are tinkering with blockchain applications, Levitt says: Making the case for one should include the fundamental understanding that this doesn’t have to involve selling a publicly traded cryptocurrency.
That might sound obvious to early adopters and other blockchain enthusiasts, but it’s the kind of common misunderstanding that makes other people pump the brakes.
2. Wipe away the magic fairy dust
Separating blockchain from Bitcoin is important not only in terms of cutting away misunderstandings but also in cutting through the deafening buzz surrounding blockchain. In many corporate environments, that kind of buzz might give people pause or lead to outright skepticism. Is this just hype, or is there an actual benefit here?
“In deciding whether to use blockchain, it is helpful to think about whether [its] unique characteristics provide business value,” Red Hat technology evangelist Gordon Haff recently noted. “For example, if an industry has no system of trusted middlemen – or if existing middlemen are expensive or otherwise add friction – blockchain might be a good fit.”
“Separate hype from reality,” advises Maciej Kranz, VP of the strategic innovation group at Cisco.
Marta Piekarska, director of ecosystem at the open source blockchain platform Hyperledger, says making the case for blockchain shouldn’t be that different than any other new project or investment.
“Any evangelization should come with education on what are the benefits and costs of introducing a [new] technology,” Piekarska says. “Blockchain is not magic fairy dust. It is a technology that can enhance existing enterprise solutions by reducing the cost of audibility, increasing the reliability of data, and allowing for multiple distrustful parties to exchange information in a way that makes everyone comfortable.”
3. Focus on what blockchain can really do
Now that you’ve dealt with the hype, focus on the legitimate potential benefits of blockchain. Experts advise that you focus on trust and transparency as a pair of starting points: Blockchain could deliver value in any scenario where trust is an issue, in any transactional relationship or business process involving data or other assets.
“The true benefit of blockchain is its ability to automate trust in the enterprise, as it allows consumers, enterprises and governments to better manage and automate transactional relationships,” Kranz says.
The kicker: Blockchain can potentially do so faster and cheaper than in transactions or processes that depend upon centralized third parties to complete.
“Because an intermediary is not needed to reconcile the data, blockchain dramatically reduces the time and cost of transactions, and ultimately leads to the creation of new value propositions,” Kranz says.
Piekarska at Hyperledger concurs: “Trust is delegated to the technology.”