3 Reasons Enterprises Are Moving to Decentralized Blockchain Applications
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At BlockWorld Conference in San Jose last month, I was amazed at the level of enthusiastic interest by large global enterprises to use blockchain for transactional applications. Although the general public may associate blockchain with popular cryptocurrencies like Bitcoin, enterprises are moving to blockchain for its ability to handle trustless transactions and secure record keeping.
At the conference, I spoke to one of the BlockWorld speakers, Emmanuel Thiriez, founder of Platform 6, about the movement of enterprises to decentralized blockchain applications. Emmanuel has unique insight into this trend. In addition to blockchain technology expertise, Platform 6's parent company, Amalto, already has a long list of enterprise clients, including Chevron, GE, Iron Mountain, Suez, Superior Propane, and Thales.
Gartner's "Top Predictions in Blockchain Business" report pointed out that projects by enterprises that apply peer-to-peer decentralized models without a middleman are rare. Indeed, most enterprise blockchain projects still rely on a central application that interacts with the underlying blockchain technology.
My question to Emmanuel, “Why should enterprises be moving to a peer-to-peer decentralized model for blockchain business applications?”
His answer provided insight into the evolving industry of enterprise blockchain software development.
1. Afraid of the Risk of a Single Point Failure
If a blockchain-based application works with central management, why change it? With today’s security and network infrastructure, it’s likely that downtime to a central management server is minimized. However, what about in the future? As blockchain becomes more widely used, centralized systems may see usage spikes or be impacted by attacks.
To address this concern, Emmanuel suggested that developers look into making blockchain-based applications that are really decentralized and use a peer-to-peer model for transactions and management. Each trading partner or member of the ecosystem should operate its own instance of the decentralized application and not rely on a central entity to interact with the underlying blockchain framework.
2. Centralized Control Slowing Adoption
Enterprise blockchain-based applications are usually about connecting different organizations or trading partners. If a part of the solution is centralized, each organization needs to have trust in the entity or people that control the central piece. By using fully decentralized applications, enterprises overcome this concern, therefore, speeding up adoption. A decentralized architecture allows each party to run their own instance, not having to trust any other party.
3. Concerns About Tampering
Although blockchain transactions are inherently transparent, secure, and irrevocable, organizations have expressed concerns with the risk of tampering to a centralized system. By decentralizing the blockchain application, a developer can dramatically reduce this risk. In a true peer-to-peer decentralized model, there is no middleman. Businesses can eliminate any type of man-in-the-middle attack.
This gives enterprises more confidence that they’re not putting the keys to the money vault in a single place. In order to tamper with the application, the attacker would need to compromise all the systems.
The Future of Enterprise Blockchain Applications
For blockchain-based applications, decentralization seems natural and like an easy sell to the enterprise. It takes the inherent advantages of blockchain and brings them to the transactional application. So, why aren’t all enterprise blockchain applications decentralized?
A big reason why your blockchain applications may still be centralized is that a decentralized application is more difficult to build. But companies like Emmanuel’s are improving the blockchain industry by providing platforms that make it easier to develop, package, and run enterprise-class, decentralized blockchain applications.
Blockchain will have an enormous impact on enterprise transactions in the future. Despite some adoption by enterprises, blockchain applications are still early on the technology adoption cycle. It is clear that decentralized application architecture will prevail because of the benefits of reducing risk and anxiety among enterprise adopters. From a technology point of view, it’s better. It’s also a safer choice.
Published at DZone with permission of Jesse Casman. See the original article here.
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