what closed blockchain is for blog By sasha ivanov

Blockchain truck keeps on trucking

The actual reason why permissioned chains make sense is not the ability to put simple data onto them, I don’t really think that you gain any significant advantage doing so. In enterprise environment blockchains are often perceived as just another type of database technology, using which you can put any data in the database and it just stays there forever no matter what (it is called immutability). You can’t really guarantee that just yet for open blockchains, so we came up with permissioned blockchains, which is, as a matter of fact, an oxymoron, since you don’t really need blockchain tech in a situation when there’s an administrator that can add to and delete participants from the network at will.

So why permissioned blockchain makes sense after all? They are usually considered within the framework of business/enterprise environment, where they help facilitate a certain business logic in a more decentralized way. It’s not exactly about putting some data in some fancy database, it’s more about implementing the very logic of your business in a way less prone to corruption providing an enhanced transparency level. So it’s more about what people call smart contracts, and this name starts to make sense in enterprise environment, which is not the case in open chains set-up, where we could probably call them blockchain scripting or something.

You can’t bring a new level of transparency and flexibility by just writing your static data in a collection of replicated databases, be it even hashes, root hashes, or any other beautiful cryptographic structures. You do bring new things to the table by bringing transactional business logic of your applications into this new, maybe just to a certain degree, but still decentralized environment.

An example would be useful now. Imagine you have a big IoT system, for example a transportation company running several hundred trucks with independent drivers. There are sensors in each truck transmitting various parameters about the condition of different vehicle systems and truck location. The data is used to monitor the condition of the truck company’s fleet, predict the equipment failure and pay drivers for the goods delivery. We’ll definitely see now some attempts to write data like that in the blockchain, actually just because we can, because it’s hard to say what sense it can make. There might be a tiny bit of sense if you consider a case where the data is being tampered with post factum, that is some bad guy tries to make believe that a given truck is in better conditions that it actually is. That can happen, sure, but I do not think it is so widespread that we need a whole DLT machinery to handle it.

On the other hand, if we consider the business logic that we can implement on the blockchain in which we make some automated decisions based on the data we receive, it starts to make sense.

For example, a driver is paid more if he takes a more efficient route and his truck is in a better overall condition.The data received is being fed to a smart contract, and a driver is credited a certain amount of tokens fully automatically, and the money once earned can’t be taken from him.

If a driver tries to tamper with the data transmitted by the sensors he can be exposed by analyzing it against the big data collected during the operation of the company and he can be immediately suspended as a result.

We can see that by decentralizing not the data storage but the very business logic we do get a totally new picture where things work quite differently than before. Only by decentralizing processes we make tangible progress in the architecture of our system.

The real power of the upcoming permissioned blockchain platforms is the new way to conduct business. Those platforms will provide a new infrastructure, which is desperately needed for the next wave of technological revolution. They will allow to automate in an incorruptible way the essential business processes, making them to a certain extent objective, that is independent from intrusion of potentially malicious parties. Business logic implemented in a decentralized way make the business itself more decentralized, which means more transparency, fewer middle men, and more profits as a result.

It is true that systems like that actually could have come to light even before Bitcoin and blockchain tech; but the real power of blockchain technology for now is not the technology itself, but the message behind it. It has proved that we’re able to create decentralized systems, and they can be potentially a real game changer.

Let’s stop thinking about using blockchains as a database for dumping hashes, let’s start implementing the logic of our real world applications on them, and this will be the beginning of WEB 3.0.