Blockchain: What are the implementation challenges?

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Blockchain

This is a contributed piece from Prince Kumar, assistant manager of digital marketing at Adeptia

 

Blockchain, the immutable digital ledger, is creating waves across different industries. Its technology backbone and trust-based peer to peer networking model promises to upend conventional business processes. However, the technology is still in infancy and we have seen its prominence mostly with Bitcoin. Organizations planning to deploy blockchain for other use cases should expect setbacks. Haphazard adoption can disrupt the way you operate. It needs to be standardized with a strong integration layer for other use cases.

 

How to understand blockchain technology

Blockchain is a highly secure and algorithmic immutable ledger that provides a future-ready architecture for companies to transact and exchange business critical information. It is a shared tamper-evident ledger that records a detailed history of transactions with watertight security. The technology establishes a ‘Single Version of Truth’ for tracking multiple transactions and supporting peer to peer networking. It is an ingenious innovation by an anonymous group teamed under the name of Satoshi Nakamoto, whose vision is to create a currency that does not need a central authority to validate it.

To understand blockchain, we need to view it as an application that functions on different distributed servers. At its heart, there is a transaction database shared by all nodes that run as one single stack. A single node can run all other blockchain nodes locally. Blockchain client leverages Google’s LevelDB database to store metadata internally. This unique setup makes it a 100% decentralized transaction system.

What is blockchain all about? What’s the current state of the vendor market? And does its biggest potential lie in securing the Internet of Things? Discover these answers and more in A c-suite guide to blockchain

For the first time, blockchain lets us achieve decentralized consensus without the use of a centralized server. By storing data across its network, blockchain eliminates risks that come with data being held centrally. Decentralized blockchain may use ad-hoc message passing and distributed networking.

 Blockchain enables peer to peer network with a horizontal topology with no centralized node. All nodes can scale horizontally or vertically to support a collaborative, consensus service that dictates the terms of transactions. Each node keeps a copy of the database that involves payment and history of transactions.

Blockchain nodes maintain the complete ledger of transactions without the need of third party lookup. This becomes possible with the ‘Nodes of type Miners’ by which ledgers are authenticated and processed. Nodes perform a peer discovery to validate other nodes with the help of an authentication protocol. All this enables higher level semantics, handshake logic and serialization format for transactions.

The Nodes put each set of information into blocks. Additional information is added in blocks before or after them. Further blocks can be added to incorporate alterations and changes to blocks. All blocks are stacked together and every new block is dependent on the cryptographic hash of the previous block.

 

The Bitcoin blockchain is a different entity

When you own a Bitcoin, it actually means that you own a cryptographic key on a virtual wallet supported by blockchain technology. The underlying technology enables authentication key to allow users in transferring ownership or trust. The parties to a contract can write entries and control the record of information.

The fundamental architecture of the Bitcoin blockchain enables a unique mode of authentication and authorization. It reverses the cultural paradigms of centralized consensus. The new approach is ‘decentralized consensus’ on which the whole Bitcoin protocol functions. This protocol enables nodes to continuously record transactions in a sequence without the need of third party verification. Every new block carries a unique fingerprint called “hash” of the previous block to secure authentication of transaction source. Hash ensures that the transactions have been entered in a sequence and there is no duplication.

The consensus logic offering a higher degree of unbundling worked successfully in favor of Bitcoin. The organization was able to integrate different endpoints in a dynamic network. Any user can set up a wallet and interact with the other members of the network. Other industries will have different data schemas, versions of truth, Master data management rules, and technology stacks. Therefore, ssomething which has worked for Bitcoin might not work well for other industries.

Medium to large organizations with large number of disparate systems for Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) or billing systems will face dilemmas in embracing Blockchain. They will face perennial issues while allowing these systems to converse with in their ecosystem as well as with Blockchain protocol. A fair share of the problems will come from the application integration side. They will be restrained by burgeoning IT complexity from reaching overarching business benefits.

A thing to note here is that Bitcoin is not operating in a complex Application Integration landscape. In fact, it turns the relations as endpoints for allowing data miners or wallets to integrate. In a complex IT environment, an applications might be holding too many endpoints that need to be integrated. To top that, there will be several integration issues that will require a reckoning.

 

The integration barriers to blockchain

Let’s take the example of a telecommunication behemoth planning to embrace blockchain technology. The organization uses CRM systems to take the customer order and send it forward to a provisioning system. The provisioning system will again trigger the order to a shipping system over the network. The organization will also be using a billing system to generate bills in recurring cycles once the order is fulfilled. All these systems will be using different data formats and models for storing the data. These systems will be working in isolation and storing data for accomplishing only certain objectives. Most of these systems are stove-piped and might offer limited modes of integration with other business systems. In such scenarios, IT will fight the biggest battles for generating polyglot coding to pipe old data and bring it into new technologies.

From a distance, blockchain might seem to be offering similar advantages as of Bitcoin to other industries. But it needs to be re-architected for different use cases. Organizations need to closely evaluate which business operations will be closely working with blockchain. For lasting success, it should be integrated seamlessly with other systems in an IT network.

Factoring integration into the IT ecosystem is a good way to address the problems of enterprise Blockchain adoption. Applications can create transaction data that needs to be shared with partner applications and the same can be moved into a blockchain network. With this approach, they can harness existing data in local databases and simultaneously take advantage of blockchain. It will help organizations to push previous data in the blockchain architecture and integrate it with legacy systems as well. Data mapping functionalities will prevent deduplication errors and bugs from entering the blocks.

Smart companies are overcoming this challenge with a hybrid IT integration framework. It provides an end-to-end platform to make the electronic data interchange fast and smooth. It can help also users to move huge workloads and push it into a common data warehouse. The integration layer will minimize the disruption by allowing application specific data mapping on a generic layer. From one interface, the team can remove, add, or update any system(s) without any impact on other systems. With a single access layer, organizations can harness more value and synchronize Blockchain with other technologies.


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