Ethereum Privacy use-case: Call for tender
Further to the introduction of Ethereum Privacy, an easy way to leverage public blockchain infrastructure while maintaining business confidentiality, and the technical dive into the technology, let’s discover how to implement a use case.
Background of the use case:
Wholesale Rice Corp (WRCorp) is an American rice importer who regularly purchases from several different Indian, Chinese and Thai companies. They compete against each other for maintaining their share in the American market.
WRCorp leverages this situation by running calls for tenders where none of the potential suppliers shall be aware of the consulted competitors nor what was the price and conditions of the selected supplier.
Since WRCorp currently submits individual faxes or emails to consult with the suppliers the process is cumbersome and prone to frauds.
Decision is taken to use Ethereum Privacy to perform the next call for tender over
blockchain technology
without investing into
a large infrastructure.
A call for tender of rice is initiated by WRCorp with a (simplified) request for a quantity, a variety, a quality range, a date of delivery and an expected payment scheme. The suppliers must respond within 3 days with a minimum and maximum quantity in oz, the quality, the variety, the price per oz, the payment delay financing cost, the related tax price, the shipping method and the expected delivery date.
WRCorp may terminate the call for tender at any moment and after the response delay can select one or several proposals by confirming the desired quantity (without anyone but the supplier knowing). Non-selected suppliers are notified of the termination of the process (for them). Selected supplier(s) must confirm the trade to WRCorp to seal the sell transaction.
One-off actions to get ready:
- WRCorp installs Ethereum Privacy and get its public key.
- WRCorp communicates with all its suppliers, giving its public key and asking them to install Ethereum Privacy then share their own public key.
- WRCorp and its suppliers may have to sign terms & conditions that confirms Ethereum Privacy proofs are enforceable proofs in court (legal work needed)
Blockchain infrastructure is now ready. It relies on the always available public mainnet accessible freely via providers like Infura or Etherscan.
- WRCorp gets a smart contract and a static website designed (see draft below). The website pages can be given to the suppliers or the suppliers can design their own based on the smart contract definition.
- All actors buy ether for fuelling the communication over the public blockchain. A 10$ equivalent would be enough for a few call for tender (today 1 ether = 170$) and
Executing the call for tender:
- WRCorp issues the call for tender by deploying the smart contract to the desired suppliers’ public keys.
- All actors then follow the protocol described above, enforced by the smart contract business logic.
- WRCorp and selected supplier(s) can extract the transaction proofs to have a legally binding contract of sell and purchase. This can also be done at any later time.
Conclusion:
As this realistic use case shows, using public blockchain secured with Ethereum Privacy is simple and can be implemented in a few weeks’ elapse time.
When comparing this setup with a consortium (eg Komgo, Clipeum, MarcoPolo) approach to implement a private blockchain network (Corda, Quorum, Pantheon or Hyperledger) you realise quickly the benefits of leveraging the public blockchain infrastructure instead of investing into a dedicated infrastructure.
Smart contract (example):
The smart contract implementation follows the Ethereum standard. However, it must be designed taking in consideration that not all participants see all transactions.
For instance, in the below contract issuer is always involved, each supplier is involved one by one. So, the data structure and function parameters and conditions reflects this.
