EDI & Blockchain

Since some time there is a discussion, if Blockchain technology can replace or work together with classical EDI. These kind of discussions, if EDI is still alive or not, we had a lot of times in the last 20 years. Do you have any opinion, experience or, even better, a user story of a EDI-Blockchain project?

But at first let us clarify the two terms itself.

 

What is EDI?

Electronic Data Interchange (EDI) is the  application-to-application exchange of business documents in a standardized electronic format between business or trading partners. EDI documents can flow through to the appropriate application on the receiver’s system (e.g. SAP, Oracle, Navision etc.) and data processing can begin immediately, instead of having people involved for manual keying in the relevant data. The most common  business documents exchanged via EDI are purchase orders, invoices and advanced shipping notices. There are several  EDI standards in use today, including ANSI X12, EDIFACT, EANCOM, etc. And, for each standard there are many different versions like EDIFACT D.96A, EDIFACT D.01B etc. When two trading partners decide to exchange EDI documents, they must agree on the specific EDI standard, version and of course on the content. Both trading partners typically use an EDI translator or EDI Service Provider to translate EDI messages into inhouse files (e.g. SAP IDoc) before integration in the inhouse system.

 

What is Blockchain?

A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. A blockchain can serve as an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which needs a collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, or food traceability.

The first distributed blockchain was conceptualised by an anonymous programmer or group of programmers, known as Satoshi Nakamoto, in 2008 and implemented the following year as a core component of his digital currency – bitcoin – where it serves as the public ledger for all transactions.The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem without the use of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.

Do you have any opinion, experience or, even better, a user story of a EDI & Blockchain project in your Supply Chain environment? Do you think that EDI & Blockchain are the technologies of the future? Or is it just a hype actually?

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