What is Blockchain?
A blockchain is simply a distributed database that stores a reliable / immutable record of who owns what, and who transacts what.
Blockchain is based on distributed ledger technology, which records data across a peer-to-peer network.
- Every participant can see the data and verify it using consensus algorithms.
- Authenticated data is entered into the distributed ledger as a collection of “transactions” forming a "block", stored in a chronological “chain of blocks”
- The blockchain's integrity is secured through the smart use of cryptography
Blockchain, as the basis for "Internet of Value", can record any items of value from land titles, to shares in companies, to the laptop or smart phone in front of you... The possibilities are limitless!
What are smart contracts?
Smart contracts were enabled in to Blockchains by the introduction of Ethereum in 2015. This technology allowed participants to set up rules that automatically trigger actions, events, and payments once certain conditions are met. These become self-executing agreements made between several parties.
For example, smart contracts have the potential to use real-world information from GPS, RFID, or IoT devices to trigger supply chain workflows, events, or actions – such as payments or asset transfers.
Types of Blockchains
Public blockchains
Anyone can read a public blockchain, send transactions to it, or participate in the consensus process. Every single transaction is public, and users remain anonymous. E.g. Bitcoin and Ethereum
Consortium blockchains
In a consortium blockchain, the consensus process is controlled by a pre-selected group – a group of financial institutions, for example. The right to read the blockchain and submit transactions to it may be public or restricted to participants. E.g. Hyperledger
Semi-private blockchains
Semi-private blockchains are run by a single company that grants access to any user who satisfies pre-established criteria. There are no discriminatory barriers to access, and in some cases these blockchains can be completely open.
Private blockchains
Fully private blockchains are controlled by a single organization. The organization determines who can read it, submit transactions to it, and participate in the consensus process. However, these private ledgers are missing a key blockchain ingredient: decentralization...
SAP and the Blockchain
Read about SAP Leonardo.
SAP BaaS - Blockchain as a service
Benefits
- Fewer intermediaries - Peer-to-Peer platform
- Faster processing for multi-partner scenarios
- Transparency of information and process status
- Fast ROI - Leaner, more efficient process execution
- Security - Has proven very difficult to hack
- Automation - The blockchain, through the use of Smart Contracts, is programmable
How Blockchain Benefits Network Business: Supply Chain Use Case (Source SAP)
Soon, any Internet of Things (IoT) device can register an event that automatically triggers a business process, for example ordering new inventory to keep a production line running. Here the blockchain, as a trusted distributed ledger, can help ensure validation of the order through a digital signature and facilitate the order getting through to the company’s network of suppliers. In a more complex digital supply chain scenario, different suppliers might be able to submit their offers directly to blockchain, and the actual order is anchored in the distributed ledger as well. New suppliers only need to be onboarded onto the blockchain network once, and can then subsequently benefit from the built-in trust when interacting with other participants.
Soon, any Internet of Things (IoT) device can register an event that automatically triggers a business process, for example ordering new inventory to keep a production line running. Here the blockchain, as a trusted distributed ledger, can help ensure validation of the order through a digital signature and facilitate the order getting through to the company’s network of suppliers. In a more complex digital supply chain scenario, different suppliers might be able to submit their offers directly to blockchain, and the actual order is anchored in the distributed ledger as well. New suppliers only need to be onboarded onto the blockchain network once, and can then subsequently benefit from the built-in trust when interacting with other participants.
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