The initial idea of Blockchain was introduced in 1992, but only until 2008 the first real blockchain application on “Bitcoin” was conceptualized by a person (or group of people) known as Satoshi Nakamoto. Since then Bitcoin and other spinoff cryptocurrencies have been a hot topic. In recent years, people start to look for applying blockchain in different business sectors, and one key sector is Supply Chain.
Fundamentally, Blockchain is a distributed ledger network, which can be explained by two symbols in its name. A “Block” is just a ledger of all transactions that occurred across a certain internet protocol in some duration of time. Each block is signed with a cryptographic signature called hash value.
A cryptographic puzzle (aka. hash puzzle) needs to be solved in order to take any action on a block, this is often called “mining the block”. The “Chain” part of the Blockchain is by using the hash value of each block to chain itself to the past block that has been mined. Since each block has a hash puzzle and linked with each other, it is almost impossible to change transaction data on blockchain. To improve the security even further, blockchain introduced a mechanism called “consensus”, which means each ledger is broadcasted to each computer node in the network, for any change of that ledger, there must be 51% of all computer nodes agrees with such change. This prevents fraud or double spending without requiring a central authority.