The blockchain concept has gained more and more attention these days. Enabling multiple stakeholders to share information without a central administrator is one of the benefits of the technology, which is now being deployed in a wider range of vertical markets beyond crypto-currency use cases.
The blockchain concept has gained more and more attention these days. Enabling multiple stakeholders to share information without a central administrator is one of the benefits of the technology, which is now being deployed in a wider range of vertical markets beyond crypto-currency use cases.
That’s the statement raised by
Hyperledger, an open consortium bringing together a community of organizations and individual developers to establish protocols and standards to improve the performance and reliability of blockchain technology.
According to Brian Behlendorf, Executive Director of Hyperledger, blockchain solutions allow different parties that do not trust each other to share information without requiring a central administrator. “The value of decentralized control is that it eliminates the risks of centralized control. With a centralized database, anybody with sufficient access to that system can destroy or corrupt the data within. This makes users dependent on the administrators,” Behlendorf said.
With blockchain, transactions are processed by a network of users acting as a consensus mechanism. “Everyone is creating the same shared system of record simultaneously. Records can only be added, nothing can be deleted, as blockchain is immutable,” he said.
Diverse user scenarios
According to Behlendorf, blockchain solutions have been used in crypto-currency settings for several years now, but now people are exploring use cases beyond crypto-currency. “Any business network that records transactions – and can’t depend on a central proxy that everyone has to trust, and for which those ledgers must be immutable – can be remade through blockchain technology,” he said. “People started to question if blockchain could be applied to more industries and use cases as a way to transform the way people manage identities and personal information, drive honesty and greater transparency.”
He noted that the first clear use cases for blockchain outside of the major digital currency systems are in financial services, but now there are known use cases in healthcare, government, supply chains, and more.
One example Behlendorf cited is supply chain management, which provides a natural set of use cases for blockchain. “Because there are so many transactions between parties (supplier, logistics, wholesale, retail) and because the various parties maintain independent views of their transaction history, there are often issues requiring dispute resolution. Because a supply chain can be very fragmented, it can be difficult to track the provenance and/or location of materials in the supply chain. There are also issues of fraud and theft of material in a supply chain,” he said. “Yet, by sharing information securely and reducing risk of tampering, the participants in a supply chain network can reap significant rewards in terms of more efficient and accurate transaction processing.”
He further mentioned that Walmart is currently testing blockchain technology for supply chain management with a pilot project that leverages distributed ledger technology to track and trace pork in China and produce in the U.S. — two high-volume product categories with large markets. “The technical platform that Walmart will use is based on Hyperledger Fabric, a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation. Intended as a foundation for developing blockchain applications, the platform has modular architecture that allows for plug-and-play components, such as smart contract, consensus and membership services,” he said.
While blockchain technology is relatively at a beginning stage, its future potential can’t be ignored. “Various supply chains are currently experimenting with blockchain solutions to address the many areas of opportunity to improve the efficiency, identify fraud and theft more effectively, and to track provenance and location of material in a supply chain. In the longer term, as the technology matures and performance, throughput and scale increase, we may see more comprehensive instrumentation along a supply chain through the intersection of blockchain and the internet of things (IoT),” Behlendorf said. “it’s not too crazy to think that in the next five years, nearly every Fortune 500 company will be transacting on a distributed ledger, and automating their processes using smart contracts.”