Big Mistakes Enterprises Are Making With Blockchain

Rage Review : For most enterprise applications, blockchain is only a small part of the entire stack, which is why many projects go wrong. Therefore, to determine the potential value of blockchain technology, it is necessary to rethink how decentralized solutions in business and industry will affect the value chain and its functions that were previously impossible. Blockchain-based innovation may first appear in regions such as the Middle East, Africa, and Asia, because there are no problems with legacy systems here, and governments are willing to implement new methods.

Translation: Nicole

Using blockchain in an enterprise setting is like fitting a square peg in a round hole.

It’s no surprise, then, that enterprise blockchain experiments often lead to strange and disappointing results. All of this is part of the hurdles that new technologies encounter as they grow, and it’s also the first time projects are run by enthusiasts and aren’t even part of the discussion in the boardroom or at the industry level.

The latter is important because blockchain technology is a fundamental technology that can solve some complex problems. As my good friend Bart Suichies once said:

“Blockchain itself is nothing special, but it is very useful when applied to other things.”

What does this mean? For most enterprise applications, blockchain is only a small part of the entire stack. This is where many projects go wrong.

They started with this question:

“What business problems can blockchain technology solve? In most cases, the answer is ‘none’ because the current problems exist specifically due to the current design and architecture of legacy systems.”

It is not advisable to try to use blockchain solutions, and even if you try, the results will not be ideal.

To determine the potential value of blockchain technology, it is necessary to rethink the decentralized approach in business, industry, how decentralized solutions will affect the value chain, and the functions it can achieve that were not possible before.

Top-down reflection

Let's apply this to a concrete example.

Most people can say that blockchain can make data portable across healthcare systems and pave the way for new approaches to electronic health records (EHRs).

It’s a nice idea, but blockchain will never be the underlying technology for EHRs in current healthcare IT. That’s because the systems are built around healthcare organizations and their processes, and were never designed to connect to other healthcare entities—much less data from a Fitbit or Philips watch.

As we redesign healthcare IT with patient-centric solutions, the only way to do it is to integrate with blockchain because it is the central point for the data needed. This is a very small but very important part of the larger infrastructure that blockchain can enable.

The challenge here is that the discussion needs to take place at a strategic and industry level, not in building meetings. This will require not only a fundamental change in IT solutions, but also a new way of looking at processes, patients and organizations.

This different perspective implies a shift from a process-centric view to a patient-centric one, as well as a rethinking of the role and value of specific providers within the overall healthcare system and a reworking of incentive systems.

Complex challenges

Therefore, the most difficult question in the established healthcare system is where to start. I firmly believe that some initiatives, such as the one Gem and Capital One are working together to redefine debt management, can not only bring immediate results, but also be the beginning of systemic transformation.

And then there's a great example of a healthcare system that can solve the Estonian data transfer problem.

But you have to understand that Estonia can start from a blank slate - a 'luxury' that mature markets in Western Europe and the U.S. do not have. This blank slate, which requires the absence of legacy systems and a willingness on the part of the government to enforce new approaches, provides fertile ground for building blockchain solutions.

I predict that foundational innovation using blockchain technology will first come from the Middle East, Africa, and Asia.

In other parts of the world, we can wait for this to happen, or we can start having a mature discussion with others in our organizations and at the industry and political level.

Is it hard to look past that? Indeed. But even if one thinks so these days, complex challenges cannot be solved with simple solutions.