Blockchain Technology and the IT Integration Battle

By John Scutz

Blockchain, the open digital ledger, holds the promise to upend business operations and enable new ways of working. The Blockchain elements like cryptographic hash, timestamp, and smart contracts are likely to disrupt almost every industry. Industry experts believe that the technology is new and its implementation will require new ways of thinking and strategy. Technology integration will be required to connect Blockchain with other systems, communication protocols, and technologies in real time. An organization should completely overhaul its previous systems or look for a solution to integrate it with legacy and other systems. 

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Blockchain Technology: What is it, and Why it is important?

Blockchain is an open, distributed, cryptographically-secured ledger which uses blocks to keep a record of transactions. These blocks keep a ledger of records linked together with a hash key. More blocks are used to add more information and create a lineage of data concurrently at different places. The cryptographic hash ensures that no one person has the right to make changes to the ledger.

Mutual consensus of the parties is needed to make changes to the ledger. This approach is called global consensus or distributed consensus where each party of the peer to peer network should be in agreement about the ownership of currency. The parties can make use of smart contracts to manage workflows of approvals and make payments. Specialized nodes called miners do all the calculations and issue currencies.

The Blockchain platform is an application that runs distributed servers. The core of the application is modelled as a secure and decentralized ledger where each block uses the cryptographic hash of previous application. Changing the hash of a single block automatically changes the hash of all other blocks. That’s why it is nearly impossible to breach the Blockchain architecture. These element make Blockchain a 100% decentralized ledger that is also highly transparent and secure.

The Blockchain nodes hold a special meaning to the Blockchain architecture, they play the role of a third party authenticator. The nodes across the distributed architecture can run Blockchain locally. These nodes are not centralized and they enable peer to peer (P2P) networking on the IP protocol. They consume and provide services equally for supporting a consensus service. Every node keeps the full copy of a database and payment history of Bitcoin. In this way, the Blockchain architecture is prevented from downtimes.

The users can store the Blockchain data in a relational DB or as per user preferences as Google’s LevelDB stores metadata internally in the Blockchain Client.

Bitcoin Blockchain: A Different Beast Altogether 

So far, the best known usecase for Blockchain is Bitcoin. The Blockchain architecture works uniquely for Bitcoin. It supports the cryptographic key of Bitcoin’s virtual wallet that allows users to transfer ownership of trust. Bitcoin Blockchain has transformed the cultural paradigms of centralized consensus into decentralized consensus. This protocol enables nodes to record transactions and eliminate third party authentication.

The hash provides a unique fingerprint of previous transaction blocks to authenticate transactions. Authentication at every step establishes a trust based network where a lineage of data is established without duplication and multiple sources of truth.

The Way Blockchain Worked for Bitcoin Might not Work for You

Bitcoin thrived successfully using the Blockchain architecture. However, there is no guarantee that the architecture will deliver the same benefits to other industries. The technology addressed problems relevant to the cryptocurrency world in unique ways. In Bitcoin’s case, users were setting up wallets for connecting with other parties and completing the transactions quickly.

Other industries with a complex IT environment will face problems in adjusting themselves to Blockchain. There will be several data management rules, and technology stacks to connect with Blockchain. Connecting the technology with too many endpoints, protocols and technologies will be challenging.

Medium to large organizations with business systems for Enterprise Resource Planning (ERP), Client Relationship Management (CRM) or billing systems will face perennial IT issues while embracing Blockchain. An integration strategy will be required to climb the IT complexity and integration barriers.

Blockchain Technology Integration

From a cruising altitude, Blockchain might look like a technology that will deliver similar benefits as that of Bitcoin. But it needs to rearchitected and customized for different use cases. Getting to the next quarter century of success with Blockchain will require end-to-end data integration. It will enable users to create application data that can be easily moved into the Blockchain architecture. More value can be harnessed by integrating Blockchain with legacy systems in a network and reusing the data in backend. Multiple sources of truth and data duplication errors can be prevented from entering into the Blockchain. Huge workloads can be pushed into a common warehouse where data mapping can be performed on a generic layer. From one single interface teams can add, remove, and update systems with minimum impact to other systems.

Blockchain is poised to make changes to business operations in different industries. The recent Bitcoin triumph and potential benefits are exciting industry leaders to embrace the technology. However, haphazard adoption of Blockchain can have blowbacks. Implementing a new technology in a complex IT landscape will do more harm than good. There will be several integration issues that need be to evaluated and taken care of. Industry leaders will need an integration strategy to beat back the challenges of IT complexity.

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