Michael G. Solomon - Blockchain Data Analytics For Dummies

The last main category of blockchain features is directly related to the fact that the entire blockchain is replicated to every full blockchain node. Every full node can see the entire blockchain, providing unparalleled transparency. Although data stored in blocks is commonly encrypted, the data itself is available to any user of any node. If the data is unencrypted, anyone with access to a node can see it. If it is encrypted, a user with the proper decryption key(s) can access blockchain data from any node and then be able to decrypt it.

Blockchain transparency makes it possible to trust the integrity of the data. Any node can (and does) routinely verify the integrity of each block and, therefore, the entire blockchain. Any modifications to the “immutable” blockchain data become immediately evident and easy to fix.

Now that you know some of blockchain's core features, it's important to also have a clear picture of your primary business requirements. The only appropriate blockchain use is when a blockchain feature aligns with a business requirement. Although many business requirements differ from one enterprise to another, some common requirements exist:

Controlling and recording transactions: This requirement is the process of using applications and data systems to promote, control, and record the activities required to carry out a business operation. The act of recording activities documents some actions that change the state of the enterprise’s stored data.

Reducing or eliminating excessive cost: Ongoing pursuits of enterprises that want to stay in business are to monitor the costs of operation and to identify and reduce (or eliminate) waste.

Pursuing efficiency: Process efficiency can deliver the dual result of reducing cost and increasing quality. Both results are desirable to a profitable business operation.

Preserving artifacts for analysis: Compliance, incident investigations, and analytics require the existence of historical transaction data. Collecting, managing, and archiving this type of data requires planning and ongoing resources.

Protecting availability through redundancy: An enterprise’s information system assets have value only if they're accessible on demand by authorized individuals. The organization must enact plans to store and maintain redundant copies of critical data for when the primary data become inaccessible.

Exposing data without compromising privacy: This business requirement is often the most problematic. Most enterprises place a high value on their data, whether it's regulated sensitive data or intellectual property. Sharing an enterprise’s data has value but is also risky. Sharing data in a manner that benefits the organization and its users is often a delicate balancing act.

As you read through the list in the preceding section, you may have noticed how nicely each of the business requirements maps to the earlier blockchain features list. That correlation was intentional. You also likely thought of several business requirements that weren’t in the list. That’s okay. The point of the previous two lists was to show that some business requirements align well with blockchain features.

Table 2-2combines the previous lists and shows how blockchain technology can solve some common issues that enterprises encounter.

TABLE 2-2Business Requirements and Blockchain Features

Many good examples of use cases for blockchain technology exist. In this section, you look at just a few. See if you can think of a good blockchain use case in your own organization.

One of the earliest large-scale blockchain use cases was the management of supply chains. The process of managing products from the original producer all the way to the consumer is expensive and time consuming. With today’s product-tracking applications, it can be difficult for consumers to know much about the products they consume. Some products, such as electronics and appliances, may have descriptive tags that identify places and times of manufacture, but most products we consume don’t provide that type of information.

Implementing supply chain management provides multiple benefits. The first is transparency. Producers, consumers, and anyone in-between can see how each product traveled from the place it was manufactured or acquired to where it was finally purchased and the time it took to get there. Inspectors and regulatory auditors can ensure that each participant in the supply chain met required standards.

This increased transparency occurs while eliminating unnecessary middlemen. Each transfer in the process occurs between active participants, not brokers.

Proper tracking of physical products in the blockchain depends on accurately associating the physical product with the digital identifier. For example, I recently checked my bag when I flew on a commercial airline. The agent was busily engaged in a conversation with another agent, and swapped my tags with those of another traveler. His tag was attached to my bag, and vice versa. When I arrived, the airline discovered that my bag, with the other person's tag attached, had flown to Mexico. Always remember that the blockchain only represents the physical world — it isn’t the physical world.

Healthcare has become one of the most popular topics of conversations ranging from politics to research to spending. It seems that everyone is interested in increasing the quality of healthcare while reducing its cost. The availability of large amounts of digital data have made advances in healthcare possible.

Researchers can analyze large amounts of data to explore new treatment plans, increase the overall effectiveness of existing drugs and procedures, and identify cost-saving opportunities. This type of analysis is possible only with access to vast amounts of patient medical history. The main problem for researchers is that a patient’s electronic health record (EHR) is likely stored as fragments across multiple practices and databases. Although ongoing efforts to combine these records exist, privacy is a growing concern (we’re back to the trust problem) and progress is slow.