Blockchain is an emerging technology pattern that we believe can radically improve banking, supply-chain, and other transaction networks, creating new opportunities for innovation and growth while reducing the cost and risk of related business operations. With the rapid emergence of Bitcoin in the transactions domain since 2009, many businesses and industries have invested significant resources in investigating the underlying technology that powers the popular, yet controversial, cryptocurrency.
Blockchain is a peer-to-peer distributed ledger technology that first gained traction in the financial industry because of its capacity to issue, trade, manage, and service assets efficiently and securely. The distributed ledger makes it easy to create cost-efficient business networks without requiring a central point of control, in marked contrast to the world of SoR (System of Records), where every member in the ecosystem needs to maintain its own ledger system and reconcile transaction updates with one another in inefficient, expensive, and often non-standardized inter-organizational operation flows.
As the shared ledger concept gains traction in the business world, blockchain smart contracts are also getting a lot of attention from industry [Eth]. A smart contract is a collection of business rules which are deployed on a blockchain, and shared and validated collectively by a group of stakeholders. A smart contract can automate business processes in a trusted way by allowing all stakeholders to process and validate contractual rules as a group.
Bitcoin and other cryptocurrencies were designed to be completely open, decentralized, and permissionless: anyone can participate without establishing an identity; one only has to contribute by spending computation cycles. Under the Bitcoin model of blockchain, there is no central authority that controls admission; these networks have been called permissionless. Bitcoin is costly to operate because it requires innumerable proof-of-work computations [N09].
Hyperledger takes a much more flexible approach to consensus than the traditional blockchain model. We expect most–but not necessarily all–of our use cases to require permissioned blockchains, something that cryptocurrencies do not directly support. However, we expect that even some of the use cases of permissioned blockchains will require different consensus algorithms. For instance, round-robin consensus may be sufficient for certain small, highly trusted blockchains, while other blockchains may require Paxos or PBFT variants. For this reason, Hyperledger includes support for modular, plug-and-play consensus. This modularity gives Hyperledger the potential to save computation cycles, scale efficiently, and respond to the multitude of enterprise use case requirements by providing a secure, robust model for identity, auditability, and privacy.
HyperLedger second fabric, called “Sawtooth Lake” is a highly modular platform for building, deploying and running distributed ledgers. Distributed ledgers provide a digital record (such as asset ownership) that is maintained without a central authority or implementation. Instead of a single, centralized database, participants in the ledger contribute resources to shared computation that ensures universal agreement on the state of the ledger. While Bitcoin is the most popular distributed ledger, the technology has been proposed for many different applications ranging from international remittance, insurance claim processing, supply chain management and the Internet of Things (IoT).
Hyperledger has picked up steam in the past few months and Hyperledger now has more than 80 members that is helping to create an open standard for blockchain technology. To provide a comparison, Hyperledger has grown by 170% in the past six months adding in new companies’ every day.
The blockchain platform must provide a means to allow every participant on a supply chain network to input and track sourcing of raw materials, record parts manufacturing telemetry, track provenance of goods through shipping, and maintain immutable records of all aspects of the production and storage of a finished good through to sale and afterwards. In addition to employing both the Business contracts and Asset depository patterns described previously, this case emphasizes the need to provide deep searchability, backwards in time through many transaction layers. This requirement is at the core of establishing provenance for any manufactured good that is built from other component goods.
Master Data Management
Master data, which is usually non-transactional business information, is a key and foundational component for many industries. Having one version of truth on this core data, where authorized parties can submit changes and the designated validators accept those changes, will resolve many of data quality and integrity issues.