Challenges of DLT Implementation

A methodology for Blockchain (intra)entrepreneurs

Blockchain adoption does not only present challenges and benefits, it also requires methodological decision-making

There are some important questions and thoughts one should address before opting for a blockchain adoption in regard to value and supply chains, as well as processes in general.

When considering applying blockchain technology, start the endeavour by asking:

  1. What problem or task to be executed requires a solution?
  2. What is the profile of the user that will interact with the implementation? Are users willing to use a digital system?
  3. What environment and medium will have to be used to access the solution and participate?

Building on these questions, a technical analysis would be needed to explore the de facto implementation possible and adequate. For this, relying on experts and developers is of essence. Such an analysis relies on continued research and an awareness that goes beyond the developments in the developer community. Blockchain research and development has to be guided by a methodology and undertaken in a strategic manner.

There are different ways one can tackle a blockchain implementation process: Either you start with a small number of involved stakeholders in a centralised research and development (R&D) structure or opt-in a big consortium, in which all large stakeholders and their interests are included.

Smaller joint ventures have the benefit of achieving a faster pace in regard to R&D as consensus is easier to achieve. Thus, viable solutions can be found with less time-investment. At the same time, smaller arrangements are in a constant competition with concurring models and later on faced with the difficulty of getting everyone on board, negotiating intellectual property rights, and governance structures.

On the other hand, large consortiums have the benefit of pooling resources, diversifying risk, and already including stakeholders from the beginning making them possibly easier to be adopted in the end. But decentralisation always comes with a trade-off: As with political systems (like in the trade-off between democratic procedure and federalism, and efficiency), the more decentralisation a collaboration, the longer it takes to reach consensus in regard to a decision.

In addition, one has to consider several dimensions when developing a blockchain implementation:

  • magnitude: meaning scope, scale, and frequency of the solution,
  • risk: security, reliability, and accuracy of the system, and
  • time: the latency and degree of real-time needed.

A step-by-step methodology

Unifying the aspects mentioned throughout this article, we can establish a step-by-step methodology to guide assessments in regard to blockchain adoption:

  1. one has to analyse and understand the weaknesses and risks of the current system, and identify the tasks that should be addressed by the solution. This has to be done down- and upstream;
  2. abstract the risks, weaknesses, and tasks to include their susceptibility to changing environments, demand trends, and problems occurring in current supply chain systems;
  3. evaluate how blockchain technology and IoT can help address the previous insights;
  4. assess your users to ensure that the solution includes them;
  5. decide on your approach for R&D – small joint venture or rather a large consortium?;
  6. develop an environment and medium fitting approach by scaling progressively, i.e. select one aspect you want to tackle and first deal with that one before including more, include experts and stakeholders in the field, and then scale the solutions up by including a broader scope in regard to the number of stakeholders, geographical implementation, value chain scope, and solution implementation area.

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