The US Department of the Treasury has just published five tips for building blockchain projects.
According to the Bureau of the Fiscal Service website, the list is based on the lessons staff learned while working on a proof of concept blockchain system for tracking physical assets, such as computers or cars, which began last autumn.
After months of tinkering with distributed ledgers, the first and most important insight offered is for people to ask themselves: Is blockchain technology a good fit for this concept?
These are some of the questions the Treasury recommends using to determine if blockchain technology is central to the project:
- Do you need a structured central repository of information?
- Is more than one entity reading or writing transactions to a database?
- Is there less than total trust between parties/entities in the ecosystem (for example, one user will not accept the “truth” as reported by another user)?
- Are central gatekeepers introducing costs and /or “friction” when verifying transactions (for example, manual verification)?
- Are there routine or logical interactions that occur that could be programmed to self-execute (for example, smart contracts)?
If the answer to several of those questions is yes, the next step could be interviewing a variety of different stakeholders to understand their pain points, the Treasury states. It also recommends seeking out diverse teams and documenting the entire process, to help spot weaknesses and opportunities.
The website warns, though:
“Include both blockchain skeptics and non-technical people. A team comprised of only pro-blockchain people can be blinded by the hype and force a square peg into a round hole.”
The advice concludes by advising that entrepreneurs carve out time for explaining the basics of blockchain technology to everyone from investors to lawyers. Again, this is because diverse perspectives can help teams get beyond the hype surrounding blockchain experiments.
“There is no way to sugar coat it – agency governance processes can be time-consuming,” according to the website. “Building enough time into your project plan to present and explain blockchain technology in clear, easy-to-understand terms will help you plan for, and move through the process swiftly.”
Department of the Treasury image via Shutterstock