Blockchain Integration: Connecting Ecosystems

Enterprise blockchain will forever change the way businesses store and track data along with their transactions. Technology is continually evolving regardless of the enterprise, so it’s critical for IT departments to keep their current systems of records and the enterprise applications along with the new applications brought about by blockchain technology.

Adopting blockchain into the already established technology stack of businesses will add more layers into the already multi-layered enterprise architecture. This would bring drastic changes to how enterprise systems are integrated.

Building Blocks of Blockchain

Essentially, any proposed blockchain solution should have the following key components:

Shared Ledger

The earliest design of the Bitcoin blockchain was to democratize visibility. In an enterprise blockchain, however, this idea would have to be redefined because of the regulations involving consumer data. All information, once verified, is expected to be copied to every node, so transparency should be absolute and access to information should be based on permission.

Public and Private

Public blockchains the likes of Ethereum and Bitcoin are available for use without permission. Any node can perform any type of transaction and also take part in the process of consensus in order for the blockchain to move forward.

Private blockchains need permission and are operated by a consortium or organization. Access is only given to users that are already verified and trusted and have been granted permission to use the blockchain if proof has been provided and accepted. Unlike public blockchains, private blockchain transactions are faster since there is no need for a huge network of hashing and large computations.

There are trade-offs between public and private systems, which include optimizing network rules, flexibility, censorship, cost, and transaction processing rate.

Cryptography

This makes sure that transactions are verifiable and authenticated. Each new block has a cryptographic hash of the former block and makes it harder to break by any process in the distributed system.

Irreversibility and Immutability

All data inside the nodes are secured cryptographically, making it impossible to change the data, which eliminates threats to the integrity of data.

Trust Systems or Consensus

The consensus protocol is created in order to maintain an unambiguous and common transaction order and blocks and makes the integrity of consistency of the blockchain is protected across all geographically distributed nodes. State of consensus is achieved when all the nodes produce a single output and all of them produced by the nodes have been validated as stated by the rules of the protocol.

Business Contracts or Rules

This is an important part of any business in order to lay out the state of the transaction or the flow of value. Contracts are designed in order to set a unified goal that all parties must adhere to.

Enterprise Integration

Huge organizations use a large number of applications running in different silos that need to be shared in order to create a consistent and unified way to operate. This process, in which applications are linked within the organization, which enables data sharing and business processing, is referred to as enterprise application integration. (EAI).

In the same manner, there’s a need for businesses to share data and functionality among each other in a controlled way. They need to automate and integrate important business processes outside of their own organizations. This is another form of EAI made possible by the exchange of structured messages that businesses agree to, which is called business-to-business (B2B) integration.

Both types of integration have a single goal, and that is to integrate functionality and data encompassing multiple parties and systems. The business processes and systems in these outfits are changing constantly along with the technology that allows the unification of B2B transactions.

Evolution of Integration

Integration technologies aren’t at all new. In fact, its roots can be traced way back in the 1980s where the idea of integration first became mainstream.

Data Integration (1980s)

Perhaps the oldest known mechanism of integration, data integration in the 1980s was modeled in two approaches:

• File sharing — This approach was used for within and cross-organization exchange of data. By using FT and universal protocols, file sharing made the exchange of application data possible across operating systems and machines.
• Common database — This approach was used for the integration of applications solely within the organization.

Back then, these two methods weren’t performed real-time and were done per batch, which limited reliability and scalability.

Functionality Integration (1990s)

Date integration didn’t allow for a real-time exchange of data, but functionality integration in the 1990s showed business how the real-time exchange is essential for business processes.

• Object request broker — This approach introduced the broker component, which enabled several applications in different languages to reuse the same architecture and communicate directly to each other. This method also introduced new systems such as language-independent interface, registry, transactionality, concurrency, security, and naming.
• Remote procedure call — This provided a lot of enhancements over low-level socket-based integration by hiding data marshaling and networking complexity. However, this architecture was in its basic form.
• Messaging — This system made business processes easier by ensuring guaranteed and in-sync delivery of messages.

These three are already huge leaps in technology, but they were more keen on system integration rather than the integration of applications. From synchronous to asynchronous, from point-to-point to peer-to-peer, these approaches did not control what type of data was validated or exchanged. Regardless, this early form of integration allowed B2B integrations through the exchange of EDI-formatted data, even if the process or data weren’t clear or understood.

this was the time in which interface definitions were first used along with the services signification for application integration.

Service-Oriented Architecture / Microservices (2000s — 2010s)

Service-oriented architecture (SOA) paved the way for Web Services. The foundation of web services includes:

• WSDL: independent format for describing service interfaces
• SOAP: common message format
• XML: language-independent format for data exchange

Combined with BPM and ESB implementations, these standards allowed for integrations to prioritize on the semantics of business integration, as opposed to previous technologies that focused on enabling system integration primarily.

With web services, data is not exchanged blindly. Contracts were made to be read by machines with the right interface definitions. These type of contracts allowed a system to validate and understand the data before it reaches the other system.

By 2010s, the microservices architectural style was introduced, which saw an improvement in ESBs and SOA. What changed here the most was the use of REST-based interaction in replacement of the WS and distributed system decomposition.

This was the phase wherein contract definitions and common standards were introduced in distributed systems.

Blockchain-Based Integration (2020s)

Data exchange over common standards and protocols are necessary, but the service contracts do not give an overview of the business processes being used running on remote systems and behind the contracts. As per the contract, a request might be valid, but it could be invalid depending on the process’ current state. It becomes even more troublesome when integration doesn’t happen between two parties, but among several parties involved in a peer-to-peer structure.

It also happens that multiple parties are part of a single business process, which is owned by all parties and not just one of them. For a multi-party transaction to function properly, it is important that transparency is maintained throughout the business process and its current state. That being said, blockchain technology has become relevant in terms of implementing distributed processes of business among several parties.

Blockchain-based integration expands the use of shared service contracts and protocols with shared business processes. Using blockchain will enable all parties to share the same business process by way of smart contracts. However, coming up with a unified request, process and conclusion require the business process to be in the same state, and that can be done using a distributed ledger. In a smart contract, the past states are shared is not the primary goal, but it is a prerequisite of the runtime of the shared business process.

Using blockchain enables business processes and common date models to be shared in a single but shared business network. This transition may not be applicable in all industries since this needs to have all parties involved in the network to have a similar understanding of business processes and data models. For this reason, blockchain integration can only be applied in certain industries wherein there’s a need for a standardized process, such as healthcare, supply chain, finance, etc.

Implementation Considerations

Businesses need to consider which transactions will be part of the blockchain and they must know how to define them. There are solutions that help clients move closer to their goals by using blockchain to identify desirable, feasible, and viable cases. These solutions help integrate and build blockchain technology by recognizing business processes where this type of technology is applicable.

Recommendations for the Implementation of Blockchain:

• Early planning of smart contracts, but delay development until all business issues, be legal or technical, are resolved
• Creating systems for monitoring and to create a network-wide “dead man’s switch” in case unexpected issues arise and for the damage to be limited and controlled
• Preventive measures against multi-miner implementations so long as an organization finds it usable and practical
• Use a solid and reliable open source code base such as Bitcoin or Ethereum
• Create a plan that will help reduce operational risk
• Identify the opportunities presented by blockchain and come up with a specific use for each implementation and at the same time set a clear expectation of the outcome of each application

Summary

The proper application of blockchain will result in a substantial change in the way business processes are developed and deployed. While change is inevitable, new blockchain solutions should also be used along with mainstream application systems like CRM, ERP, etc in order to achieve business success. But as mentioned above, not all blockchain solutions are the answer. There are factors that need to be considered to determine where it is applicable.

When it comes to enterprise, blockchain should be a part of its core and its integration should be seamless along with other back end legacy systems. This connection will enable different organizations and industries to communicate and share digital assets with ease.

Enterprises who choose to use blockchain integration should be aware of its benefits beforehand, one of them being improved ROI and more value due to the partnerships within an ecosystem.

Blockchain solutions have the power to transform the processes used by business into more efficient ones and connect those functions back into their core processes. By allowing multiple parties to participate, a separate integration can be avoided by providing a layer that’s accessible to those granted with permission, and eventually increase the efficiency of all processes involved.