What is Blockchain?
The Blockchain concept was invented by the yet unknown Satoshi Nakamoto, which was subsequently implemented for the purpose of supporting the Bitcoin cryptovaluta. However, it is now well known that the new technology can be used in far more areas.
How does Blockchain work?
Blockchain is used to secure and distribute data in a new and unique way. A blockchain is a list of encrypted blocks that are continuously growing. In each block, there is typically a cryptographic reference to the previous block, a time stamp and a number of transactions.
The primary chain (the blue blocks) is the longest series of blocks. The primary chain starts at the first created block (the orange block) and continues to the current block. Orphaned blocks that are not part of the series (the green blocks) exist without being a part of the primary chain.
One of the most important elements of Blockchain is the so-called ledger. A ledger is a database containing the blockchain content and all those that are part of the blockchain network have a copy of the shared ledger. Changes in the ledger can only be made by the majority of devices in the network.
By blockchains such as Bitcoin, these ledgers consist of the so-called miners digging for digital gold, the famous Bitcoins.
The hashing riddle
If a new block is to be added to the chain, there must be agreement among the miners, which is calculated by an algorithm, a consensus algorithm based on a hashing mystery that the miners compete to solve first.
The point of hashing task is to verify whether the information included in the block are correct, which makes it extremely difficult to cheat.
True and verifiable registration
It is only possible to update a Blockchain if there is consensus between the participants in the system. Additionally, once it is entered, data can never be deleted again. Therefore, Blockchain contains a true and verifiable record of all transactions ever made in that Blockchain system.
Impact on the ERP systems
Blockchain technology can play an important role in areas such as supply chain management and production, areas typically falling under the ERP systems domain. It is therefore not unthinkable that blockchain will have a significant impact on the ERP systems in the near future.
The value which can be achieved by integrating Blockchain with ERP does not depend on transferring new information to the distributed ledger, but by pulling existing data from the company's systems and at the same time be able to control with whom the data is shared.
Supplement to ERP
Blockchain can create a single version of an information, in which the underlying IT system undergoes a simplified blockchain and ensures that all systems, rather than talking to each other, speak through a blockchain.
Although this may lead to a simpler integration among the IT systems, Blockchain will almost certainly not replace the ERP systems.
However, Blockchain can work as a complementary supplement that, through an application, simplifies the integration between the parties and reduces the applications vulnerabilities due to the system's inherent security.
Shortly a common phenomenon
In the future, we will see Blockchain technology integrated into the ERP systems at many companies in widely different industries. Initially, the technology will probably be used in industries such as Supply Chain Management and Logistics.
At what time Blockchain technology becomes a common phenomenon in the ERP industry is unknown, but experts point out that it will happen soon.