Blockchain: Holy Grail or not?

“Are you doing something with Blockchain?” A frequently asked question of our (potential) clients. Blockchain is the ‘Holy Grail’ which will solve all problems. Many companies will sell it as just that. While in the core it’s a way of bookkeeping. Let me take you on a blog journey in the world of the digital collaborations. Topics like this, the logistics supply chain and the demand chain will be discussed.

Blockchain

I’ll kick off this blog series with an introduction of the digital collaborations. Blockchain is a system that records data, mainly known as the central mechanism in all forms of cryptocurrency. Bitcoin, a form of cryptocurrency, and its blockchain distrusted known entities. In particular, to make financial payments without being dependent on a centrally trusted third party. While itself offers transparency and integrity of protected data storage. Because of these characteristics, it has received much attention as technology that goes beyond trading financial transactions. Think about cloud storage, Internet of Things (IoT), supply chain management, healthcare and the clever trading of material.

Logistics Supply Chain

In addition to permissionless blockchains (which Bitcoin uses for example) where every writer and reader can participate at any time, there are blockchains with a form of permission: permissioned blockchains. This form of blockchain is very common within the logistics supply chain. Inside the permissioned blockchains, a limited number of parties are recognized as readers or writers who have rights within the network. One central entity regulates who has the right to participate in writing or reading within the blockchain. To prevent everyone from seeing everything, in the context of privacy and General Data Protection Regulation (GDPR), writers and readers within the blockchain can also use parallel environments that are interconnected. A good example of this is R3 Corda.

Permissioned Blockchain

This form of blockchain shares similarities with a centralized database, which you may  also know from our Avalanche, MediTracker and TrackOnline packages. Given the database structure we know best at Bexter, I will mainly focus on a permissioned blockchain, because it best matches our products. Within a blockchain, different participants are assigned to a network. We can compare this with the supply chain, from client to carrier to delivery location. They all have a certain role in the processing of transactions. For example, this would be supplier A who has his cargo paperclips delivered by transporter X to his customer B. Each party within this network agrees with a number of set rules. In this case supplier A agrees to put itself as a “writer” within the blockchain. This allows him to create a transaction within a “block” and adds this block to the the chain. In my example, the readers within this transaction would be transporter X and customer B. They are entities that don’t expand the blockchain, but rather participate in the transaction process within the supply chain. This way they could read, analyze or check the data. This naturally causes the question of whether this system is better suited than a centralized database.

Stay tuned…

Before we talk about the operation within a logistics supply chain, there’re a number of characteristics that need to be explained. In the next blog I will further discuss the relevant characteristics for permissioned blockchain and centralized databases and systems. Let us know how your organization deals with new technological developments, such as IoT and blockchain. If you want to know more about permissionless blockchains or have another question about this system? Do not hesitate and contact Kevin Miedema.