Deutsche Bank And WEF Research: 11 Questions To See If Blockchain Is Right For A Business By Simon Pearson

Deutsche Bank and the World Economic Forum has released a 11 question guide to see if Blockchain is right for a business

Blockchain is now an undiscussable for businesses. It is thought that by 2023, blockchain will support the global movement and tracking of $2 trillion of goods and services annually across many industries. That is why Blockchain technology is seen as a solution for a wide range of real world challenges. But the question remains: how can we know that blockchain is the right technology for a business? Deutsche Bank Chief Data Officer JP Rangaswami and other colleagues at the World Economic Forum have come up with an exhaustive guide to help entrepreneurs that are asking themselves that exact same question.

This distributed ledger technology (DLT) has been proposed to power financial products, to provide cybersecurity solutions and even to enable people to sell their homes without a real estate agent. Deutsche Bank and World Economic Forum blockchain guide is a 11-question document that most entrepreneurs should ask themselves before going all-out with blockchain technology and it is based on an analysis of how blockchain is used in a variety of projects around the world and following interviews with selected chief executive officers.

Blockchain will reach maturity around 2025. Source: Gartner

The guide is broken down into different paths, which were incorporated into a framework of “yes” and “no” questions. And its goal is to assist a business leader once a specific problem is articulated. “This framework cuts through the noise about blockchain and refocuses the technology into the way business leaders think,” said Jennifer Zhu Scott, Founding Partner of Radian and member of the Global Futures Council on Blockchain.

Likewise, Deutsche Bank Chief Data Officer JP Rangaswami added that: “These 11 questions were developed and then trialled with chief executive officers at a workshop at the World Economic Forum Annual Meeting 2018. The test group included C-suite executives from large corporations, most of whom said they were actively considering adopting blockchain technology in some manner.”

The 11 question blockchain guide

  1. Are you trying to remove intermediaries or brokers?

2. Are you working with digital assets (versus physical assets)?

3. Can you create a permanent, authoritative record of the digital asset in question?

4. Do you require high performance, rapid (millisecond) transactions?

5. Do you intend to store large amounts of non-transactional data as part of your solution?

6. Do you want/need to rely on a trusted party (e.g., for compliance or liability reasons)?

7. Are you managing contractual relationships or value exchange?

8. Do you require shared write access?

9. Do contributors know and trust each other?

9.1 Are contributors interests unified or well-aligned?

10. Do you need to be able to control functionality?

11. Should transactions be public?

Basically, if the answer to all those questions is “yes”, blockchain is highly recommended for that company. If, otherwise, the answer is negative, this distributed ledger technology might not be the right solution.

Blockchain guide. Source: World Economic Forum

Use Case: A Special Effect Company

The guide also illustrates how it can be implemented in a real-life company. In this case, a special effects company and their software – that is used by millions of game developers and industrial designers – was put into test.

One of the main challenges these kinds of companies face is providing large-scale graphics processing units to render customer projects – these games require a lot of processing capacity and this can be an expensive process.

At a first glance, Blockchain technology can actually help greatly this company as it could enable it to tap into undiscovered possibilities to solve its business problem: completing more projects for less money.

The special effects company needs to access as much processing power as possible from a variety of processing units for the cheapest amount of money possible. Since most devices have consumer-grade processors already installed, everyone with a device could contribute their processing power for a fee. In short, when you don’t need the processing power, you can sell this down time to this special effects company that needs some extra processing power for their new game, and get paid for it (or receive a token on the blockchain).

This is the path the company took when implementing the 11 question guide as shown in Deutsche Bank and World Economic Forum research:

“The company doesn’t need a middle man to help them get this extra processing power (this is the move from A to B on the toolkit graph). Their assets are digital and there are no other companies managing the assets (move from B to C to D).

Since the transactions can take place overnight, they can move from D to E. Once a job is complete, the software company doesn’t have to store that data, so that gets them to F. Everyone can participate. Move from F to G.

The company has to prove that they paid you for this time, but they don’t have to know specifically who wrote the contract, so they can move from G to H to I. For the last steps, network needs to be able to control the functionality (for upgrades for example) and be public. This analysis shows that the application should select a public, permission-free ledger. This solution applies blockchain to allow distributed graphic processing units to be shared across the globe, reducing costs, and reducing waste from underutilized units.”

This is only an example of how this guide could help entrepreneurs all around the world that are thinking of implementing blockchain in their business. Though blockchain is not for everyone as needs differ from one company to another, this guide can easily point out whether it would be beneficial or not.

Blockchain is a computer technology that allows its participants to store and share data securely within the network. “Blocks” store the pieces of information, including the date, ID of transaction, time and even IDs of who is participating in that data transaction and in the whole of the blockchain. These blocks store information that distinguishes them from other blocks called “hash” that allows participants to tell it apart from every other block within the “chain.”

This is basically how a blockchain works, a sort of database that highlights basic principles: trustless, security as every piece of information is encrypted using cryptography and transparency as all participants need to agree to every modification made in the blockchain. And these principles can be reproduced in almost every business area.