Implementing Blockchain For Businesses

Blockchain conceptually is a type of database that’s decentralized and distributed. What this means is that, contrary to the traditional databases which are controlled by one single entity, blockchain databases are distributed among a group of nodes. Every transaction that is performed is maintained by every node individually, giving it certain advantages over centralized databases.

The rise of Bitcoin’s popularity has been the primary reason why Blockchain has become the new buzzword. Since 2013, the general interest in blockchain has risen multifold.

While blockchain is not an absolute solution to problems in the existing system, there’s a lot of merit in considering it for specific business processes. We list the factors that should influence your choice of a database system for your business:

Disintermediation / shared control

Disintermediation is the biggest selling point of blockchain. Removing the intermediaries and the need for an administrator in any process makes it a lot faster. Authorization and execution of every transaction happens via a peer-to-peer system instead of central administrator. The nodes of the blockchain individually execute transactions, a consensus is reached and the transaction is recorded.

Why would you need disintermediation

The biggest drawback of a mediated process is the involvement and dependency on the middleman. Taking an example of banks, people entrust their data with banks. Every transaction needs to be processes and approved by the bank. Banks need to ensure that the data is always up-to-date and maintained properly. The investment to maintain this data is huge.

Blockchain offers a method to remove such middleman. Imagine being able to transfer money without depending on your bank’s process.

Disruption in a market is closely related to disintermediation. Uber is the world’s biggest network of taxi’s without owning a single car. For a user, the abstract view of opening an app to book a taxi nearby closely resembles a peer-to-peer network consisting of service providers and service consumers. AirBnB is another such example.

High Fault Tolerance

Systems built on blockchain are extremely robust. Every transaction is individually processed by every node in the blockchain. This redundancy of data removed dependency on any single node. So if you have a blockchain of 10 different nodes, even if 5 of them shut down due to technical glitches or power outage, the system works smoothly without the need of immediate technical support.

Centralized databases also aim to provide robust systems by creating backups which are reverted to in case of outage. But ensuring robustness in centralized databases is rather expensive due to the infrastructure required and the technical team required to maintain it.

Blockchains are designed to allow addition of nodes as required. They also have inherent processes to make sure that every node is up to date. And the nodes can run on commodity hardware. So if your business heavily relies on the robustness of data, you’d might want to consider using a blockchain based system rather than a traditional centralized database. The same reason makes blockchain very attractive while developing software for financial services.

While blockchains seem like the perfect database system to implement for any business type, there are a few tradeoffs.


Blockchain systems by design, are more complex and slower than other types of database systems. Redundancy, requiring every node to individually process a transaction, makes it rather slow. Blockchains also need to rely on public-private cryptographic mechanisms, when propagating a transaction from one node to another. Basically, every single transaction has to verified individually to maintain order, compared to a central database system, where once a connection is established – subsequent transactions don’t need individual verification. Implementing blockchain requires a lot more complex implementation and is comparatively slower process.


Every node in a blockchain database has a complete view of the current state. This is the only way that each node can individually verify a transaction. Of course, there are cryptographic techniques in place to ensure robustness and privacy. But having a centrally located database with explicit granting of read/write access makes for a more confidential database. There are processes being designed to make blockchains more confidential, but until it becomes a commoditized practice, a centralized database system is a better choice if you need absolute confidentiality.

Blockchain is still a nascent technology compared to the existing database systems. Until this technology becomes commoditized, you’ll need to rely on experts (which are still few in number) to help you it. While there are a lot of companies replacing their current systems with a blockchain, it’s still not mainstream. Codebrahma is an expert Blockchain application development company. To fully understand the scope and limitations of this technology for your business, you’re welcome to drop us a message.

Written by
Anand Narayan
Published at
May 30, 2017
Posted in
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