As a SaaS business, one thing that we get asked A LOT is “do Segura use Blockchain technology?” No we don’t, and we’d like to explain why.
What is Blockchain?
Blockchain is a huge buzzword within supply chain technology at the minute. We found this great little video that explains what Blockchain is, and why it’s used:
How is Segura different to Blockchain?
Segura do not use Blockchain. Blockchain is a valuable technology and it certainly has its uses in today's connected world, but it is not without its challenges.
Blockchain's value comes from decentralising trust; by having distributed copies of the transaction "database" shared between all users of the system. Each transaction becomes a block within the blockchain and each block has a unique "reference" which allows blocks to be added and verified to all of the distributed databases. Once added, the blocks cannot be edited without invalidating the chain. This creates data assurance through consensus between all of the distributed copies of the transactional database. Whereas, at Segura we manage all of the data within the system independently for the supply chain owner, we are able to ensure data consistency without the need for using Blockchain technology.
Sounds great... so why don't Segura use Blockchain?
The first challenge with Blockchain is the speed. Updating all of the distributed blocks within the chains takes time, and as more transactions are created, the size of the distributed database gets larger and larger. The traditional approach to mitigating this problem is to use more computers... however in Blockchain that just means more distributed databases which results in the process taking even longer.
An additional challenge is controlling the data. Blockchain operates the policy of the majority being the authority. If enough nodes (>51%) are manually altered in the Blockchain then this becomes the authority and the rest of the Blockchain is updated to match this, this is known as a majority attack.
How Blockchain is utilised
Blockchain can bring many advantages to growing companies, having been adopted by many small businesses. In comparison to other technologies, it has much lower costs of security and data storage, as well as other overheads, meaning that small businesses can play on a much more level playing field.
The widest adoption of Blockchain technology has been across the finance sector, an area where is has the possibility to “revolutionise interactions”. By far the most popular use of blockchain for the finance industry is Bitcoin – a revolutionary cryptocurrency. However, the Guardian points out that even within finance, Blockchain is one of the most overhyped technologies ever. Not only is it less efficient than other existing databases, but it also requires substantially more storage space.
Never say never but as it stands today we are able to deliver all of the benefits of Blockchain without any of the downsides .