Permissioned blockchain applications that support business processes are very new. Despite this recent blockchain development, we have found that it makes sense to think of the evolution of blockchain applications as happening in three stages:
In the first stage, the blockchain is a passive shadow ledger. It captures transactions and events that originate in the systems of record operated by blockchain participants.
While a blockchain application is a passive shadow ledger, no systems of record have any dependency on the blockchain applications. The blockchain application can be developed without any risk of breaking existing systems or processes. This makes it possible to experiment with the data model for the blockchain application until the participants are confident that it is correct.
Once the blockchain application has a stable data model, there may be reasons to have the blockchain application send notifications to systems of record when events of interest are recorded on the blockchain. Having the blockchain send event notifications allows events to be handled in a timely fashion. In this second stage of development, the blockchain is an active shadow ledger as it is an active participant in business processes.
Once the blockchain application is thought of as an active participant, blockchain participants begin asking for the blockchain to recognize additional events that and to notify their systems of record of the event. A participant may want the blockchain to recognize an event but then discover that there is no existing system of record to process the event. In this situation, the easiest way to arrange for the event to be processed may be to add a smart contract to the blockchain that processes the event. Once such a smart contract has been added to the blockchain application, it is no longer just a shadow ledger. It has become a common system of record for blockchain in business.