By now, you’ve probably heard more than you want to hear about blockchain. Aside from the exhaustion, however, you may be thinking to yourself, “Will this nascent technology disrupt my business one day? Could it in some way add considerable value to my company today?”
Perhaps you’ve seen the early fruits of proof-of-concept (PoC) blockchain initiatives from some major corporations, such as IBM. Maybe you’re interested. Maybe you have even identified a good use case and are ready to contemplate a PoC initiative in your own organization — but you’re not yet totally sure how to go about it.
If that describes you, the following may offer some useful insights to help you get your PoC initiative off on the right foot:
What Type of Blockchain Do You Want to Build?
As a corporation or a startup you do not want to share sensitive business information with the whole world. (Universal love is not usually delivered in this manner.) This means a public blockchain is, in most cases, unfit for your business. This leaves us with the option to build a private (or “permissioned”) blockchain, or a private blockchain that makes only a small set of data available to the general public.
How Should You Build It?
When it comes to building a private PoC blockchain, you have two options:
1. Use a Blockchain Platform
A. R3 Corda
This is a blockchain technology effort led by a consortium of major financial institutions. The consortium’s goal is to leverage blockchain technology to streamline and speed up the execution of financial agreements between and among its members. (One may consider such agreements as “high finance.”) Without blockchain technology, transaction reconciliation is both time-consuming and costly. The use of Corda could result in significant cost savings across the financial services industry.
If you’re a major financial institution and you’re seriously considering blockchain technology, Corda is the logical platform for you.
B. IBM HyperLedger Fabric
I personally have a ton of respect for IBM. This is the company that brought us the personal computers that changed the way we work and, to some degree, the way we live. IBM was once the giant of the computing world, and today, it is still one of such giants, though it now operates more on the software side of things.
HyperLedger Fabric comes from a highly respected corporation, and the documentation surrounding it isn’t that bad at all. IBM also offers a certificate program that helps people get familiar with Hyperledger Fabric.
HyperLedger Fabric does have a few downsides, though. First, it can be very confusing. The platform has many components, such as HyperLedger, HyperLedger Fabric, Composer, and Data Modeler. On top of that, you need to download and install several third-party tools to support HyperLedger Fabric. A thoughtful approach would be to combine all these tools into one, so that one successful installation would allow you to get started.
HyperLedger Fabric’s documentation is not as good as that of Corda. I personally love Corda’s technical conceptual clarity. HyperLedger Fabric’s support quality is also inconsistent.
Having said that, if you work for a Fortune 500 corporation or have the luxury to spend half a million dollars on a team of 30 or so architects and seasoned programmers, HyperLedger Fabric may be a good choice.
MultiChain is the brainchild of a team of PhDs. If you have a small team of excellent programmers who have the time and eagerness to learn blockchain — and who also enjoy intellectual discourse — then MultiChain is absolutely worth considering.
On a personal note, I have learned a great deal about blockchain technology from Gideon Greenspan, a creator of MultiChain. To some extent, he has helped to verify my own knowledge of blockchain technology, and I’m very grateful to him for that.
2. Build Your Blockchain PoC From Scratch
If any of the following situations apply to you, you may need to build a blockchain PoC from scratch:
- You don’t have the resources of a major financial institution or a major corporation, but you do have several excellent programmers at your disposal and time-to-market is an important business consideration.
- You work in a startup with considerable subject-matter expertise.
- You’re an investor with extensive knowledge of your industry.
- You’re a professional with some disposable cash and a strong interest in blockchain technology.
- You work at a major nonprofit.
To build a blockchain PoC from scratch, you need a competent blockchain consultant who has actually built some private blockchains before.
When searching for such a consultant, make sure they meet the following criteria:
A. They Have the Ability to Create a Valid Blockchain From Scratch
You want a consultant who is proficient in critical blockchain concepts, such as:
- Blockchain structure
- Encryption such as hash, public key/private key pairings
- Key characteristics of blockchain (e.g., immutable records/data, distributed ledger/nodes)
- Blockchain algorithms, such as Merkle trees
- Byzantine fault tolerance
- Oracle (not the major database platform Oracle)
- Algorithm optimization (for scalability)
B. They Have an Extensive Programming Background
A full-stack web and database application developer background is most desirable.
An important note: The fastest way to acquire blockchain technology expertise for your team is via knowledge transfer — which you can usually acquire from an expert for a fee.
(Don) Chunshen Li is a blockchain architect and consultant with a substantial software programming background. Connect with him on LinkedIn.