The Weakest Link in the Blockchain

There are no shortages of articles today touting the latest concept in cloud based data management we call Blockchain. The proponents and critics of Blockchain have jumped on their respective bandwagons claiming the technology to either be the next great internet scam or the best thing to happen to data storage since the hard drive. Corporate CEO’s are peppering their technology staffs with questions such as: What is this Blockchain? Is this something we should be budgeting for? The truth of the matter is that the jury is still out.

What it is.

Without going into mind-numbing detail, Blockchain is a cloud based digital ledger. All ledgers are repositories for transactional data. In transportation, these data elements would be transaction records such as orders, shipment details, shipment status updates or bills of ladings (to name a few). In finance, this might be deposit or withdrawal records and so on. All of these transaction records are stored and replicated by a system that records and secures the individual transactions in redundant public or private data stores on the internet. Think of Blockchain as a clearinghouse for transactions that were previously accomplished utilizing Electronic Data Interchange (EDI) or similar transmission protocols. Of course, this is an over simplification, but this general description is really all we need for this discussion.

What it isn’t.

Blockchain is not a storage panacea. It can be a part of your Master Data Management (MDM) schema but it is not intended to replace your data warehouse or long term archival systems. It can be used to supplement your existing online transaction processing system. But it may not do the preformatting required by your data warehouse. Additionally the transaction records need to be formatted in a compatible structure (field layout) to the protocol used in your implementation of the Blockchain.  As we stated above, think of it as a temporary online transaction processing repository more so than a storage or ETL facility. 

The missing link

Before you hitch your wagon to the Blockchain there are a few details you should be aware of. In the 1950’s, the United States Department of Defense tasked an agency called Advanced Research Projects Agency (ARPA) to develop a communication network that could be dynamically routed across the country and the globe in the event of a nuclear attack. Their work formed the foundation of what we now call the World Wide Web.  In today’s environment of slim or non-existent R&D budgets, we lack the research infrastructure that created the universal standards and specifications that provided the foundation for the internet communication protocol. We are left with corporate consortiums that view Blockchain as a product innovation that can eventually be capitalized on. This leaves the end consumer with an important choice on which protocol to design their Blockchain strategy around. Uniform and universal international standards are the weakest link in today’s Blockchain implementations.

What can you do?

Choosing a Blockchain protocol is no easy task and making a long term investment in one protocol over another can be a costly mistake. Corporate and industry consortiums are all proceeding full speed ahead to make their individual visions the de-facto standard. For example, the finance industry has seemed to settle on the R3 Corda protocols. Whereas, the transportation industry seems to be settling on the IBM/Walmart Hyperledger protocol. My best advice would be to wait and see. The dust is beginning to settle and your organization should be keeping an eye on the horizon by following the various industry consortiums that have been created. In finance, the leading consortium is R3 (r3.com). In transportation, the “Blockchain in Transport Alliance” (BiTA) has brought together many of the stronger players in the transportation and logistics space. The direction that your enterprise or transportation management system provider is following will weigh heavily in your decision on which Blockchain path to follow. It is important to remember that your Master Data Management strategy is only as strong as its weakest link.