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A MULTI-FACTOR MODEL FOR USE CASE EVALUATION
Indeed, in such a widespread but fragmented adoption it’s hard to find a single killer Blockchain application. Rather, Blockchain vertical trials occur in all major industries. Since 2014, we have continuously monitored blockchain initiatives worldwide, developing an evaluation model in order to understand blockchain potential in every use cases. The model is based on the evaluation the following parameters, which drive the use case value and applicability:
- INTEROPERABILITY. Indicates the degree of openness of the system towards new actors: the increase can be both relative to the number of actors and to the type of actors. For example, it can be thought that blockchain allows more banks to work with each other, but also enhances the interaction in a trustless manner with different actors, such as other companies and regulators. All participants in the network are equal to each other and do not need to put trust in a central actor. This derive mainly from the decentralization of both the register and the consensus on its state. Interaction is improved also thanks to transparency and automation, peculiar characteristics of blockchain technology.
- SECURITY. For Security we mean the resistance to system attacks. On the one hand, these attacks can be the ledger manipulation and Denial of Service attacks attempting at making the service unavailable. Decentralization of consensus and ledger redundancy are essential to ensure security as they remove the single point of failure and guarantee immutability of data. Therefore, it becomes necessary to simultaneously attack multiple nodes and control an enormous amount of computational power, which becomes wasteful and / or unachievable the more the network is decentralized; this applies to both types of attacks. Furthermore, the widespread adoption of blockchain cryptographic standards guarantees the security and integrity of communications and transactions.
- CERTIFICATION. By certification we mean the guarantee offered by blockchain technology on the consistency of data, ensuring that data registered in the ledger have not been modified and that they are truthful. Decentralized consensus remove doubts on what is the right state of the ledger with high transparency on data, directly accessible without the need of an intermediary that could alter them.
- INNOVATION. The innovation factor reflects how much the scenario envisaged after the application of the technology is different from the current one. In fact, the service can remain almost the same, blockchain can improve efficiency in the process changing its logics and in terms of time and costs, or it can contribute to create a completely new service. The innovative aspects also depend on the level of trustless automation which removes central entities in terms of trust, dependence, and data accessibility.
- EFFICIENCY. For efficiency we talk about reduction of operating times and costs with regards to the current scenario. This typically occurs with the support of process optimization and re-engineering.
In the provided framework, Reply run its model for every industry vertical by evaluating each use case against the reported parameters. Summing up parameter scores, it was possible to identify most robust use cases and thus more impacted industries. As a result, here below you can find which use case emerged as promising Blockchain applications:
In conclusion, we observe that with regards to the shortlisted use cases:
- Use of Blockchain technologies for tracking and anti-counterfeiting purposes is a common practice across all the industries, with particular effectiveness in those scenario where risk at stake is higher such as high-value items, perishable goods and food.
- Seek for decentralization results in peer-to-peer applications trying to substitute established businesses. This sometimes represents a downstream integration opportunity for some incumbents: think about P2P insurance applications directly provided by re-insurance companies.
- Financial service providers led the adoption in a Gartner-like hype cycle. Nevertheless, many Proof-of-Concepts are in development in other industrial sectors like Energy and Healthcare.
- Consortiums and regulatory sandboxes are the preferred environments to study and test blockchain applications, with wide and prominent initiatives in industries such as Automotive, Media & Entertainment and Telco.