Ethereum
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ETH · 3w

The Supply Chain Industry doesn't need Private Blockchains, it needs Interoperability

Disclaimer: Mappo is Head of Content at aelf

Within the supply chain industry there are two problems currently plaguing every player. These are ‘isolated data silos’ and ‘untraceable, poorly documented and manipulatable data’. With the introduction of blockchain technology to many industries with ethereum’s smart contract solution in 2015, many teams have been scrambling to develop real world solutions to apply to many industry problems, including those facing supply chain networks.

The Current Solution is Broken

For the last few years the ‘solution’ was believed to require private blockchain systems in order to protect sensitive data. It was thought that public blockchains, although are not tied directly to identities, are not suitable for confidential business operations. However, this is not only a second-rate solution, but is even a dangerous concept to follow. 

A private blockchain is spread between the participating companies at best, or stored on a single, centralized server at worst. Both situations are not exactly the most secure blockchain solution, but time and time again, companies believe that having ‘blockchain’ in the solution simply ensures privacy and security. This couldn’t be further from the truth. A centralized server is still a centralized server and the security flaws don’t change just because there is a blockchain running on them.

There are two clear concerns that this approach introduces that didn’t exist before. These private blockchains are only as useful as the number of organisations that partaking in them, and hopefully, they are in a businesses current network for their product supply. As soon as they add a new client or change suppliers, freight forwarders, warehouses etc., they will need to convince them to onboard with the private blockchain. But what happens if they are already part of another private blockchain solution. Then the company will need to add their data to th...

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