Literature Review
Blockchain and its implications
Blockchain is a decentralised distributed ledger and an advanced version database available to all members of the decentralised system. It stores any kind of data in the blocks which is secure and transparent (Hamilton 2020). The data in the blockchain is immutable and cannot be altered. Rather than having a centralised system/server managed by a single server, it is decentralised and managed by all the nodes in the blockchain. The Blockchain is named as digital data or ledger in the chain of blocks. The blocks are connected with each and have a unique hash number which makes them more secure and safe.
Anything from cash to land titles to votes may be tokenized, stored, and traded on a blockchain network. Bitcoin is an example of an open, or permission-less blockchain. Instead of a physical chain, digital information (the block) is maintained in a publicly accessible database (the chain). A block is added to the blockchain when it contains fresh data. A transaction must take place - After making an online purchase, a block will aggregate thousands of transactions together, allowing an individual's purchase to be bundled alongside the details of other users' transactions (Schmidt and Wagner 2019).
The transaction must be confirmed - After purchase, a network of computers examines each transaction to guarantee it occurred as described by the consumer. In a couple of seconds, the network certifies the purchase, providing the time, quantity, and participants of the transaction.
The transaction must be put in a block - The transaction is approved after verification. The transaction's information is all saved in a block, which will be combined with thousands of others.
That block must be given a hash - After all of the block's transactions have been validated, it must be given a hash, which is a unique identifying code.
There are many advantages of the blockchain which make it a growing technology and implications in many different sectors to get the work more efficiently and effectively. The advantages are:
Data Transaction Accuracy: The blockchain provides the high accuracy of data transactions where the nodes in the blockchain server verify the data in the transaction and after the confirmation of data it is stored in the blocks. The nodes can also catch errors that can be identified if the data is mistakenly is used in the blocks, the other block can identify the error in the previous block. The verification of the data by the nodes reduces the chances of errors in the complete blockchain.
No intermediaries: There is no third party in the system of blockchain which reduces the time consumed and saves the cost of paying too banks for the transactions.
Security: The decentralised network like blockchain makes the data nearly impossible to be altered. To change the data in one block, the hacker needs to change the complete chain because every block has the hash value of the previous block.
Implications of Blockchain
Cybersecurity: The data stored in the blockchain is verified and stored in the blocks using different advanced cryptographic algorithms.
Communication: Blockchain technology is faster and more secure which can also be used in automated communication based on the algorithm inbuilt.
Government: Blockchain technology can reduce the bureaucracy and increase the security of the system. The blockchain also gives transparency which shows the statements and actions of the government to everyone.
The blockchain can be implemented in the supply chain management to track the product quality and availability in the system. The supply chain also manages and provides transparency to the farmer to consumer or retailer. The data in the chain is secure and private.
Blockchain in Supply chain management
Blockchain can be implemented in the supply chain management system to get better and more efficient results in managing and tracking the data of the products (Chang and Chen 2020). The supply chain is the complete process of delivering the products to end-users with the efforts of stakeholders and organizations. There are many challenges faced in the supply chain but the lack of transparency is still the major challenge faced supply chain. Blockchain technology provides the authority to the organizations to provide a track of all the products and transitions with transparency and security. Companies can track the complete record of the product from its origin. The transaction in the blockchain is added whenever the product changes hands. The transaction history is permanently stored in the blockchain ledger from its manufacturing to the end-user.
Blockchain technology provides efficiency and transparency in the complete supply chain management. The technology also uses smart contracts which helps in better compliance and also reduces the fees required in the legal contracts process. The blockchain is immutable and cannot be erased whole. The blockchain makes the supply chain complete transparently. The tracking system for raw materials and other source components is also provided by the blockchain. Providing the information about the origin, use manufacturer and transfer can help gain the trust and confidence of the user of the supply chain.
Figure 1: Supply chain management system with Blockchain in Health care
(Source: Khezr et al. 2019)
The above image shows the supply chain system in healthcare where the products from the pharmaceutical company and the transaction are added to the blockchain when transferred to the manufacturer. The manufacturer transfers the product to the warehouse and transported it to the different outlet warehouses from the products are transferred to the retailers and healthcare providers. The complete system is transparent as even patients at the end-user of the product can see the manufacturer, origin, and expiry date. All the transactions are added to the blockchain making a new block with the new information stored init with complete security of the system (Khezr et al. 2019). The blockchain can be implemented in the supply chain in many different sectors and many companies are already using the blockchain in their supply chain management system. In the food industry, products in the store can be traced and a record can be kept in the ledger. For example, Walmart uses the supply chain management system of the IBM blockchain (Hyperledger Foundation 2022).
References
Khezr, S., Moniruzzaman, M., Yassine, A. and Benlamri, R., 2019. Blockchain technology in healthcare: A comprehensive review and directions for future research. Applied sciences, 9(9), pp.1-28. doi:10.3390/app9091736. https://www.researchgate.net/publication/332685807_Blockchain_Technology_in_Healthcare_A_Comprehensive_Review_and_Directions_for_Future_Research
Hyperledger Foundation. 2022. Walmart Case Study – Hyperledger Foundation. [online] Available at: <https://www.hyperledger.org/learn/publications/walmart-case-study> [Accessed 2 April 2022].
Chang, S.E. and Chen, Y., 2020. When blockchain meets supply chain: A systematic literature review on current development and potential applications. IEEE Access, 8, pp.62478-62494. Doi: 10.1109/ACCESS.2020.2983601. https://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=9047881
Schmidt, C.G. and Wagner, S.M., 2019. Blockchain and supply chain relations: A transaction cost theory perspective. Journal of Purchasing and Supply Management, 25(4), pp.1-13. Doi: https://doi.org/10.1016/j.pursup.2019.100552 https://sci-hub.ru/https://doi.org/10.1016/j.pursup.2019.100552
Hamilton, M., 2020. Blockchain distributed ledger technology: An introduction and focus on smart contracts. Journal of Corporate Accounting & Finance, 31(2), pp.7-12. Doi: https://doi.org/10.1002/jcaf.22421. https://sci-hub.ru/https://doi.org/10.1002/jcaf.22421
