Blockchain is still in its infancy, but it has generated a great deal of interest with its ability to securely automate common business transactions and processes.
At a basic level, blockchain is an architecture for a distributed electronic ledger that’s shared across multiple participants in a public or private model. Rather than each party maintaining its own records, transactions execute within a blockchain with transparency to authorized stakeholders. That reduces manual work and enhances trust and security across networks.
Because blockchain involves multiple technologies, services and back-end applications, integration and data orchestration are critical factors in success. The industry has been rightfully focused on exploring various blockchain use cases and the role that integration would play.
First, it’s important to recognize that blockchain breaks down into permissioned and public categories. Cryptocurrencies such as Bitcoin, Ethereum and Litecoin are based on public blockchain, which puts more emphasis on anonymity and less on transaction processing speed.
On the flip side, permissioned blockchain involves multiple identified and trusted participants in agreed-to roles across a closed and monitored system, with a greater emphasis on transaction processing speed. Some characteristics of a permissioned blockchain are:
Shared ledgers: A distributed, append-only system of record, shared across a business network.
Smart contracts: Business terms are embedded in a transactional database and executed with transactions.
A shared ledger functioning as a system of record will interact with other applications in an ongoing and often real-time basis. Consolidation of data from other applications to behave as a system of record is another important consideration from the integration perspective.
It is vital that business solutions enable interaction with and creation of any kind of system of record. Take master data management (MDM) for example. This plays a key role in consolidating and enriching data before it’s created or inserted into a shared ledger. Once a shared ledger is created, blockchain-enabled applications can be created using workflow automation development platforms and API management enables unlocking the shared ledger data to serve data to these applications.
In sum, integration platform-as-a-service (iPaaS) provides an entire platform that enables companies to have a decentralized yet connected business that utilizes blockchain as a shared ledger.
Another area of blockchain that has seen a lot of traction is smart contracts, which can securely and transparently execute transactions within a decentralized blockchain.
Let's take supply chains as an example. Today, supply chain management relies on inordinate amounts of error-prone manual work, even using paper to manage hundreds of checklists and approvals. That means high personnel costs and delays, all while increasing the risk of fraud, data loss and breaches of privacy.
Blockchain smart contracts can completely automate this process by providing a secure, accessible digital version to all parties. In a simple use case, when a product is sold, a smart contract can automatically trigger the entire supply chain to start the production of the new product to backfill the inventory.
IoT and Blockchain
One last area worth mentioning is blockchain’s growth in the IoT space. Synergies between IoT and blockchain technologies open a range of exciting possibilities.
To give you a teaser, imagine a driverless car that can self-diagnose safety, performance, maintenance and other issues through its IoT sensors. Once an issue is found, the car executes a smart contract to order needed parts and book an appointment with a repair shop.
As of today, blockchain technology is at its peak on the hype cycle. Many of the use cases being touted are still in exploratory phases and are theoretical in nature. Nevertheless, blockchain has already been successfully proven by cryptocurrencies including Bitcoin, Ethereum and Litecoin, helping solve the always difficult problem of money.
It's definitely worthwhile to start thinking and exploring what blockchain can mean for your business, with an eye on utilizing iPaaS to integrate all the needed elements in a blockchain environment.
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