Home > Articles

This chapter is from the book

This chapter is from the book

Considerations for Meaningful and Sustainable Blockchain-Powered Business Networks

The long-term promise of blockchain as a business network implies a trusted platform for disintermediation that leads to market and cost efficiencies. Blockchain market share, which includes both technology and those industries that use the technology in the networks and ecosystems they initiate, is defined by the evolving valuation models of business networks.

In this section, we discuss the evolution of meaningful and sustainable blockchain-powered business networks. The work that the industry (technology companies, fintech start-up ecosystems, and industry consortia) has done in the past few years largely focused on maturing the technology and promoting adoption of the technology by enterprises and businesses as a means to solve current problems and pave the way for new business models (enterprise and subsequent industry focus). As the industry and enterprises realize the potential of blockchain technology and reimagine today’s business networks, which are laden with archaic processes, paper- and document-driven processes, and systemic costs, they must also address long-term considerations related to adopting the blockchain-powered business network.

To use blockchain effectively, you must consider other mechanics of the business network:

  • Choice matrix of consensus models: The industry must develop a choice matrix for consensus models that define the trust system, collusion vector, associated computation costs, and infrastructure investment necessary to support the trust system that defines the business network.

  • Systemic industry governance: Technology and industry-specific governance is necessary for the systemic digital assets, industry-specific requirements, and business systems that govern the movement, whether permanent or temporary, of digital or tokenized assets within a specific ecosystem. Essentially, such governance defines which entities can do what, who is responsible, and who investigates if a system anomaly arises. These questions, which are industry-specific concerns, must be codified in system design and network initialization.

  • Asset tokenization, control, and governance: Industry-specific elements are needed to govern asset issuance, collateralization, proof of ownership and existence, and audit requirements so as to ensure the integrity of the real assets in the system. The idea is to weave checks and balances into the system that control supply and demand and establish an audit trail to maintain systemic trust in the business network.

  • Decentralized authority framework: The notion of decentralized control and authority is tightly linked with the trust system. Of course, in a decentralized system, the notion of authority does not work well. The focus of this design principle, therefore, is on governance, culpability, and regulations.

  • Decentralization and security considerations: Decentralization and distributed ledgers have various trust advantages, such as a transparency, immutability, and network-wide transaction processing. Although these advantages lend themselves to the overall trust framework, they can also create enterprise challenges concerning distributed data, as well as business insights that can provide a competitive advantage to some participants and a disadvantage to others. The security design imperative is to factor in enterprise security while addressing the new security challenges imposed by a shared business network. Cybersecurity risks and vulnerabilities are high-focus areas.

Business networks are industry-, industry segment–, and asset-specific networks, which implies that no single dominant blockchain controls all other blockchains, and that many blockchain business networks exist. A blockchain network can focus on a plurality of business domains, such as mortgages, payments, exchanges, and clearing and settling specific asset types. In enterprise blockchain, these projects take place within a centralized (in a decentralized context and application design patterns) network that is a consensus consortium between like-minded business entities. This assumption is based on many practical factors:

  • Industry-, segment-, and asset-specific business language: This language defines the smart contract, asset definition, and control and governance of smart contracts as a proxy business representation.

  • Industry-specific asset control: This factor defines governance, management, and valuation (for asset exchange, asset fungibility, and others) of digital (representation or) tokenization of assets.

  • Industry- and region-specific regulation: Most business networks are both industry- and region-specific in their scope. In regulated industries, a business network is regulated separately in terms of the burden of adherence, compliance, and related costs that are shared in the business network.

  • Industry-specific business functions: Most industries have their own measurements, standards, and statistics that represent performance indicators, such as analytics and market data.

For enterprises today, the blockchain-powered business network is limited by the current business network. The business design impacts the technology design, and a technology design might affect business network sustainability. If the system design of the business network is not aligned with the tenets of blockchain (i.e., trade, trust, ownership, and transactionality in a multiparty scenario), the greatest strengths of blockchain might become its greatest weakness, and the business network might never fully realize the promise of blockchain networks.

Enterprise Integration: Coexisting with Existing Systems of Record

Integration of blockchain with the enterprise system is a business and technology consideration due to downstream transaction systems that feed into and rely on critical business and operation systems. Various blockchain project evaluations have revealed that adjacent system integration has a significant cost impact on blockchain projects—and if you do not address these costs early in the planning stages, they may negatively affect enterprise adoption. Such impeding elements can disrupt the enterprise’s operations. Moreover, the various fragmented systems that may have evolved as extensions (innovations) of the legacy system due to changes in business models, business process innovation, and advancement in technology can present challenges for blockchain integration.

We also must account for adjacent enterprise systems that require enterprise integration for blockchain applications and have operational implications. In the best-case scenario, the elements of trade, trust, and ownership, and the inherent properties of blockchain, such as immutability, provenance, and consensus, will foster a trust system that aids in eliminating redundant and duplicative systems and processes; such duplicative systems carry costs for the enterprise in terms of significant allocation of resources, leading to delayed transaction processing and associated opportunity costs. Our goal should be to address the fundamental problems of the existing process, leading to a flat and transparent ledger that aims to address the element of trust and time, significant costs savings, and better client service.

Blockchain Network Extensibility

Extensibility is defined as “a system design principle where implementation takes future growth into consideration.”7 It is a systemic measure of the ability to extend a system and the level of effort required to implement the extensions.

Blockchain business network design should aim at extensibility because of the dynamic nature of the business (regulation, competitive pressures, market dynamics, and others) and network growth due to inclusion of new entries, such as new ecosystem participants, as well as existing players (regulators, market makers, liquidity providers, fungibility providers, service providers, and others). Several factors must be taken into consideration regarding network extensibility in blockchain system design:

  • Extensible membership models: The design must support the inclusion of a diverse set of participants, the volume of participants, and the desired transaction processing capabilities. As the industry changes, so does business, which in implies changes in the members that join the network. The network must be designed to onboard and cope with membership changes in the network. Various network participants might want to join or leave the network. The mechanics of membership changes include access to (shared) data, which must be considered in the design. The member type is also an important consideration, because the roles and type of member might change as blockchain either disrupts or disintermediates certain membership types.

  • Trust system viability—compute equity versus network economic incentive: The appropriate trust system choices for a permissioned (public or private) network and its impact on infrastructure investment and economic viability are important because there is a divide between trust systems based on crypto assets (based on crypto economic models) and trust systems based on compute equity (or non-cryptocurrency). We must consider the long-term sustainable infrastructure costs and maintenance, which are directly related to the types of participants and their business interests in the business network. For example, the cost models of a regulator are different from the cost models of the primary beneficiary of the blockchain-powered business network.

  • Shared business model—shared costs and shared benefits: Because a blockchain-based business network is a network and ecosystem, it features shared business processes instead of flattened business processes. A blockchain-powered business network has specific business advantages, such as reduced risk, a reliable and predictable transaction network, and a reduced cost of compliance, which collectively lead to good ROI ratios.

However, shared business interest leads to other operational considerations, such as data sharing and data ownership as entities join and leave the network. The regulations around data ownership may also change from time to time, along with industry requirements regarding the durability of data. The shared cost of infrastructure, compliance, and efficiencies due to flattened business processes on a blockchain network are clear advantages of this approach, but these efficiencies can be achieved only with a sustainable structure of a business network and the correct economic models.

Blockchain Project Sustainability

Many design areas—such as business models, technology design, the trust system choice matrix, devising and employing a governance structure, and continual system analysis—are paths to ensure early success with blockchain project deployment and long-term sustainability. The idea is to design a robust, extensible, and organic system that can grow with the changing demands of a business ecosystem, and not be locked into a technology with limited flexibility.

Factors such as scale, security, data visibility, and network extensibility can be exploited to create a sustainable business network. After the network evolves and grows, there is no turning back regarding systemic issues, such as a trust models, data visibility, and competitive advantage while using the network for the shared costs of doing business. Maintaining a substantive focus on sustainability is a complex and paradoxical quest: It promotes open collaborative innovation while locking down some of the constructs, such as consensus or trust systems, and governance systems that govern the assets, smart contracts, and overall interaction in a multiparty transaction network.

As we debate the merits of signing transactions versus mining transactions to establish trust in the network, note that a blockchain-powered business network is limited by the limits of the current business network as it evolves. This is not a technology problem, but rather a business ambition issue. If the system design of the business network is not aligned well with the tenets of blockchain (trade, trust, ownership, and transactionality in a multiparty scenario), the greatest strengths of blockchain might become its greatest weakness, and the business network might not fully realize the promise of blockchain networks. Wise choices for factors such as scale, security, data visibility, and network extensibility, however, can lead to a sustainable business network.

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020