The spectacular fall of cryptocurrency platforms and lenders — such as FTX, Celsius Network LLC, BlockFi Inc. and Genesis Global Trading Inc. — may have tarnished blockchain. But crypto’s underlying technology has many more successful uses than currency speculation, including helping build transit systems and ensuring medical equipment is clean.
Blockchain allows different enterprises, organizations or group members to work together on projects. It provides digitized, verifiable information to replace cumbersome, unreliable paper documents that go back and forth among many hands.
“Blockchain is used to create trust, verifiability and compliance in decentralized, cross-company processes,” explains Benjamin Stoeckhert, SAP business development manager for blockchain.
With blockchain, there is no central platform or person ensuring processes are trustworthy and reliable. Instead, blockchain creates a digital ledger that keeps track of digital information. The ledger is secure and tamper-proof because everyone in the group can see “blocks” but cannot change them. Interactions — such as new entries, work completed or work approved — are stored in blocks that are linked together. Each block contains a unique digital fingerprint of the previous block, called a hash, creating an unbreakable chain.
Blockchain is ideal for digitizing documents, pictures, receipts and other types of records and transactions to track workflow, the individual assignments it takes to get the job done. Instead of swapping work orders, which could be changed or lost, everyone in the group can see the digitized documents as the work progresses.
Blockchain is often referred to as “trustless” because there is no central control to ensure things are done correctly. Since each process is transparent, trust is built in.
“Creating this trustless approach or replacing the need for trust by cryptographically verifiable data: this is where blockchain can lay the foundation to really achieve a great business outcome,” Stoeckhert said.
Blockchain allows parties to collaborate more effectively while saving time and money. For example, SAP piloted the use of blockchain to support the building of HS2, a new high-speed railway that will form the backbone of Britain’s transport network. As one of the biggest construction projects in Europe, HS2 could be considered an amalgam of smaller projects, such as buildings, train stations, tracks and tunnels. The project involves hundreds of contractors, sub-contractors, suppliers, logistic companies, software vendors, regulators and designers — all of whom must know the project specifications, submit their orders and be paid, along with a host of other steps.
“You have a very decentralized setup, and this is always good for blockchain,” Stoeckhert said. “From a value perspective, it’s really about using these capabilities to orchestrate processes.”
In medicine, SAP and Sartorius, a global leader in manufacturing equipment for the pharmaceutical industry, used blockchain to help ensure that equipment is free from harmful microorganisms in cases where a single error would lead to drug contamination. Sterilization processes are directed and executed between medical equipment manufacturers and sterilization service providers while they are overseen by regulatory organizations and pharmaceutical companies. Blockchain helps orchestrate this process and provides verifiable data for compliance checks.
Stoeckhert sees this ability to collaborate in a decentralized way to be a major benefit for business: “The same way you can define your internal processes and automation flows, you can now do as we call cross-company.”
Ilaina Jonas, Senior Director of Global Public Relations, SAP
+1 (646) 923-2834, email@example.com