With so much being spoken and written about blockchain, the technology seems to be in danger of being misinterpreted by the general audience. For them, it’s no more a technology, but a one-man-band that can do anything — enable bitcoin, secure data, make a coffee and more!
Demystifying the common hype around blockchain, we can simply affirm that it is “just a database”, a secure, decentralized and transparent container of data that introduces a smart concept — link each data with the previous data using cryptography. So, each transaction is linked to the previous transaction via the hash algorithms that reduce the amount of data contained in the transaction to a single and fixed length string. This string is then added to the next transaction and recalculated creating the ‘chain’.
But here, we’re not exploring how blockchain works, rather we’ll delve into how it can be adopted in the enterprise business model to harness the many benefits that this interesting technology has to offer.
Since an enterprise is a complex set-up, it involves processes to connect people and their use of information for various day-to-day purposes. A process is a formal procedure used to fulfill a specific action or transaction. Sometimes the processes may only need coordination with people within the organization, and at other times these processes may require collaborating and partnering with other organizations for various business goals.
This “Business Process”, as is commonly termed in an organizational atmosphere, could be an order, an invoice or a payment — all transactions that involve people and data. And, blockchain can help organizations to secure all these transactions.
But, can transactions be secured using a database? No they can’t!
There needs to be a layer of “logic”, more precisely business logic to merge this data with the actions that people can take using it. And, Smart Contracts are this layer of business logic, which enables blockchain to support a business process fulfillment.
Simply put, Smart Contracts manage transactions in a pre-programmed, automated way.
The common logic used to complete a transaction is either ‘If-this-then-that’ or…