What is blockchain?
Blockchain is basically a growing database which consists of chains of blocks which are linked using cryptography, which makes the database tamper proof. Multiple users could access and append data but they aren’t allowed to edit any existing data. Due to its decentralized nature, blockchain networks are nearly impossible to edit since it would require all the nodes of one network to be edited at the exact same time.
Blockchain in supply chain
An important thing to note about blockchain is the fact that it makes all kinds of transactions more secure and transparent, thereby making blockchain quite safe. As is easy to understand, the basic features of blockchain are exactly what supply chain management requires:
- Validity of a transaction is agreed upon by the involved people, this feature could be used for payments, warehousing or delivery.
- Once a transaction is agreed upon, completed, and updated in the blockchain network, it cannot be edited. In supply chain, we won’t be able to delete the records of any transaction, warehouse conditions and other details.
- All nodes on a blockchain network get to see the same thing in all the records, in supply chain management, it’ll mean that the customer and the business will be able to assess the details whenever they want and they’ll both get to see the same thing. This will help to increase transparency as a product’s origins can be traced.
- The concept of multiple nodes means that a business could reach out to anyone, anywhere and the transactions can be done over the blockchain network, which would also make the process convenient.
- The usage of blockchain in supply chain would eliminate the need to spend money on auditing
The challenge is that just having the business or just having the customer shifting to blockchain for supply chain management would be pointless without having the other party buy into blockchain. A customer would need a business on the same platform and vice versa. Another problem is that these transactions require a certain level of blockchain programming, which is something that everyone doesn’t know. These reasons, combined with the fact that cryptocurrencies change their values at a very rapid pace, have kept potential users of blockchain at bay up to this point.
(The article is authored by Nishant Nijhawan, Intern, Techxty.com. Nishant is a student of computer engineering at Delhi Technical University who believes in optimal usage of technology.)