Exploring the Benefits of Blockchain
Blockchains and distributed ledger technology have been big buzzwords in recent years, but when you look closely at this technology, you can see that it is really just a new tool to solve a long-standing challenge: ensuring multiparty trust across enterprises doing business together. Distributed ledgers backed by a blockchain can help partners achieve consensus on multiparty transactions while adding transparency and speeding up transactions, thereby taking costs out of the system and achieving better outcomes for participating organizations and their stakeholders.
However, the largest obstacle to implementing a distributed ledger is getting multiple companies to agree on which data are stored in the blockchain and how the system will be operated and governed. To achieve this close interaction among corporate entities, many companies – including Target – see the most potential for enterprise blockchain initiatives as open source. Open-source projects require all participating parties to define the governance model collectively from the outset, so companies then can focus their time working on blockchain-based solutions that will lead to greater speed, transparency and cost savings.
In mid-2018, Target began a blockchain proof of concept to help manage the certification of suppliers in our own branded paper product manufacturing. In working directly with the forest managers and certification boards, we learned that standing up a blockchain is simple from a technology standpoint, but difficult in deciding what data should live on the distributed ledger. This work on a certification blockchain was recently open sourced as ConsenSource! As ConsenSource progressed, Cargill’s work in creating supply chain middleware to store data and transactions on a blockchain came to our attention. As we learned more about the effort, Cargill and Intel took the project to Hyperledger, an open source collaborative hosted by Linux Foundation, and it became Hyperledger Grid!
I’m proud that Target will support the Hyperledger Grid project, and that we’re committing dedicated engineering resources to build out components in the Grid architecture!
Working directly with one of our largest food suppliers will allow Target and all other participants to learn from one another as blockchain technologies mature. This also gives us an instant use case in determining which data to share and how to govern a multi-enterprise, blockchain-backed distributed ledger. Solving distributed transactions within our own ecosystems was a hard task; imagine solving distributed transactions with several companies at once!
Distributed ledgers will bring a new form of transactional ability and data storage to corporate enterprises – one in which the transactions are trusted and the data is verified by a group of companies working to solve problems that extend beyond their own borders. Maturity in this space will take time, but we’ll only get there when enterprise partners like Target and Cargill dive in together.
Joel Crabb is vice president of architecture at Target.