Data Masons is pleased to present our blog series on Blockchain and EDI. Blockchain is quickly becoming less of a buzzword and more of an inevitability in the B2B world as more companies utilize it in their business practices, including in EDI processes. We're starting our series by addressing the most important question that accompanies any new technology. How secure is it? Sometimes it seems like technological advances face a constant battle between ease of use and security.
While no technology can be completely risk-free, Blockchain does have some advantages due to the way information is added and stored, and security protocols which are unique to Blockchain. Read on to learn more about how security works, and what it means for you as an EDI user.
Whenever a transaction is processed using Blockchain (also known as “the Block), it is added to a limitless chain of linked transactions, or blocks. This distributes a copy of the chain and transaction throughout the Blockchain network, which results in a decentralized, distributed ledger.
The blocks in the chain are immutable, which means that they can’t be modified once they’re added. If changes need to be made, this requires a separate correcting transaction, rather than a change to the transaction itself.
Even though shifting from correcting ledgers to creating new ledgers for corrections could be a pain, it has a couple of advantages. First, it will force companies to adjust their business practices to minimize the chance of mistakes and the need for corrective transactions. Second, it makes it extremely difficult for the data to be attacked because of security protocols such as Proof of Work.
But the need for corrections will be minimized, thanks to Smart Contracts. We'll cover them more in depth in a future blog post, but simply put, Smart Contracts will do the work to make sure that each transaction is correct BEFORE it takes place, without the need for human intervention. Today’s method often relies on validation from disparate and disconnected systems, but a Smart Contract provides another type of security for Blockchain users: assurance that transactions are correct before and after they take place.
We'll also go over immutability in the future, including, why exactly a block is unchangeable, but here’s what it means in terms of security: if a hacker or other malicious party wants to alter any data on the Block, it would mean altering the entire chain, and they would not be able to achieve a consensus. The definition of consensus in terms of a Blockchain principle is outlined in further detail in Blockgeek’s awesome post, but suffice it to say, it’s a necessity of any Blockchain transaction, and makes Blockchain a much more secure way of doing business than today’s standards.
The bottom line, though, is that the Block is only as secure as the software interacting with it. It’s an exciting buzzword and you want to make sure that your EDI system is not only eager to use it, but prepared to keep it secure and give you the peace of mind that you need. Download our brief or read the upcoming posts in our Blockchain and EDI series to learn more about how to evaluate your EDI system for this emerging innovation.