A blockchainopoly creates shared responsibility in executing a process, as opposed to the powerful position of a central power authority.
Many buzz words in technology, including blockchain, carry ambiguous definitions. Sometimes the term “blockchain” refers to the actual immutable shared ledger, sometimes to the protocol, sometimes to the application, and sometimes to all three tiers. We define blockchain to be the ledger tier, whereas the blockchain architecture refers to all three tiers of application, protocol, and ledger.
The ledger tier is managed by recordkeepers. The protocol tier provides the language for transaction validation among recordkeepers and the invoking of smart contracts, which are IF-THEN statements. The application tier automates one or more business processes to enhance a user experience.
We can use blockchain applications without divulging private information about ourselves, through the use of public keys and addresses.
A blockchain application supports one or more of these three purposes: Currencies, Contracts, and Claims. Blockchain applications that focus on currency are digital accounting systems—ledgers which record money we send and receive. Contract applications built using blockchain initiate and record transactions by invoking clauses in contracts. Claims applications capture ownership.
There are both public and private blockchains. A public blockchain allows anyone to view the ledger, use the application built on the ledger, and set up computers to act as recordkeepers for the ledger. A private blockchain exists within an organization, and the organization owns the ledger, protocol, and application.
There are three important types of patterns in blockchain: requirements patterns, risk patterns, and process patterns.
Requirements patterns help us better understand usages. There are five requirements patterns: transparency, streamlining, privacy, permanence, and distribution. The reason for building a blockchain application must be for at least one of these requirements patterns. Once we understand these requirements patterns, we can fit them to any industry in order to identify opportunities for usage. We covered over 50 different use cases in this book, crossing many industries: finance, insurance, government, manufacturing, retail, utilities, healthcare, nonprofit, publishing, music, and art.
Risk patterns are general obstacles we may face during blockchain development. Many detailed examples were provided in this book, yet can be generalized into cooperation, incentives, and change patterns. Note that the most challenging obstacles we will face during blockchain application development will be people challenges, such as accepting a new technology, and working together.
Process patterns generalize every process into Inputs, Guides, Enables, and Outputs. Inputs are provided by stakeholders and/or upstream business processes. They may be raw material, data, or any other resource that the process will transform into output. Inputs are transformed by the process into outputs. Outputs are the deliverables and goals of a process. Guides manage and control the transformation of inputs into their planned outputs. An organization’s enablers are those reusable resources that are engaged in supporting the process. If the guides are the rules, the enablers are the tools.
Master these three important types of patterns, and you will know how to best leverage blockchain technology.
The Data Management Body of Knowledge 2nd Edition (abbreviated DAMA-DMBOK2) is a great reference for assessing an emerging technology. We used DAMA-DMBOK2 in this book to explain how blockchain will impact these 11 disciplines: data governance, data architecture, data modeling and design, data storage and operations, data security, data integration and interoperability, document and content management, reference and master data, data warehousing and business intelligence, metadata management, and data quality.
Remember, concepts and principles first, technology second.
As you begin to understand the immense power and potential of blockchain, you’ll come to recognize it as a truly disruptive technology—just like the wheel, printing press, computer, web, smartphone, or cloud. And just like these other groundbreaking technologies, once you understand the underlying principles and use them to build a solid foundation, the opportunities are endless!