Blockchain Technology and

Business Applications
D r. J ithes h A
Infor mation Systems Area
IIM Raipur
Recap
• Byzantine Generals Problem
• Consensus mechanisms (e.g., PoW, PoS)
• Role of asymmetric cryptography
• Hashing
Case: Walmart’s blockchain quest: Integrating
new technology into a complex supply chain
Case: Walmart’s blockchain quest: Integrating
new technology into a complex supply chain
• Q1: What type of blockchain is used by Walmart? How is it different
from the blockchain you learnt in the last classes?
Public blockchain
• Public blockchains are open to anyone who wishes to participate.
• Anyone can become a validator and engage in the network's consensus protocol.
• All transactions are publicly visible, and anyone can audit them.
• E.g., Bitcoin
• Anyone can participate in transaction validation (mining) or transaction
verification.
• Ethereum:
• Smart contracts - self-executing contracts with the terms of the agreement directly written
into code.
• In a supply chain, a smart contract could be set up to automatically release payment to a
supplier once a shipment is received at a warehouse.
• Ethereum allows anyone to write smart contracts and decentralized applications (dApps) that
use the Ethereum network for validation and consensus.
Private blockchain
• All permissions are kept centralized to one organization.
• Only a single organization can write to the blockchain network,
control who can participate in the network, and determine who can
serve as a validator node.
• Typically used by single businesses for internal purposes, like
interdepartmental transactions, auditing, or record keeping.
• They are as decentralized as the organization running them wants
them to be.
Private blockchain
• Hyperledger Fabric
• Developed under the Linux Foundation's Hyperledger project
• Popular choice for businesses due to its modularity and versatility
• Customizable policies
• R3 Corda
• Allows businesses to build interoperable blockchain networks that can transact in strict privacy
with each other
• It is widely used in industries such as finance and supply chain
• Quorum
• Developed by J.P. Morgan
• Quorum is an enterprise-focused version of Ethereum
• It provides the Ethereum’s robust smart contract capability
• Chain Core
• This is a private blockchain platform used by organizations like Visa, Nasdaq, and Citigroup.
• It allows these entities to operate and transfer assets in a secure and private way.
Consortium blockchain
• Also referred to as federated blockchain
• Partially decentralized and operate under the leadership of a group instead
of a single entity.
• They allow multiple entities to participate in the consensus process, but
each entity is known and authorized by the network.
• A group of known entities shares the responsibility of maintaining the
blockchain.
• These entities control who can join the network and participate in the
consensus protocol, but they also share in the consensus process, which is
often more decentralized than in a private blockchain.
• The main difference is about who holds the power.
• In private blockchains, one single organization has full control, while in permissioned
blockchains, a group of entities share the control.
CAP theorm
• Impossible for a distributed data store to simultaneously provide
more than two out of the following three guarantees:
• Consistency (C): means that all nodes see the same data at the same time
• Availability (A): ensures that the system always processes the query and
attempts to return the most recent version of the data
• Partition tolerance (P): the system continues to operate despite some number
of partitions
When to use public blockchains?
• Decentralization: Useful when there is a need for a system that is not controlled by a
single entity and where anyone can participate.
• Trustless Environment: beneficial in peer-to-peer transactions.
• High level of transparency: If a high level of transparency is required, a public blockchain
is the best option.
• Examples: Cryptocurrencies like Bitcoin and Ethereum are based on public blockchains.
When to use private blockchains?
• Control and Privacy: When organizations need a blockchain solution but want to
maintain control over who can access the network, validate transactions, and
create new blocks.
• Efficiency: There are fewer nodes that need to agree on a new block, transactions
can be validated more quickly and the blockchain can handle higher transaction
volumes. This is beneficial in enterprise settings where large volumes of
transactions need to be processed rapidly.
• Compliance and Security: In industries where regulations require data to be kept
private or in certain jurisdictions, private blockchains are a good choice. They can
be tailored to the organization's needs and can enforce the organization's security
and privacy rules.
• Examples: Supply chain management, interbank transactions, and internal voting
systems are common use cases for private blockchains. Consortiums like R3 and
Hyperledger projects use private blockchains for their operations.
Hyperledger Fabric

CHANNELS
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Case: Walmart’s blockchain quest: Integrating
new technology into a complex supply chain
• Q2: Should Walmart try to scale blockchain technology and use it for more than
improving food safety? If so, why?
• Supply Chain Transparency and Efficiency:
• A secure, tamper-proof, and auditable trail of transactions, which can help track the movement of
goods.
• This can reduce errors, delays, and fraud, and improve inventory management.
• Verification of Authenticity: For high-value goods, blockchain can verify authenticity and prevent
counterfeiting.
• E.g., Electronics, designer goods, and pharmaceuticals.
• Smart Contracts for Business Transactions: Reduce disputes, costs, and delays.
• Data Sharing and Privacy: Share data securely with partners, while also maintaining customer privacy.
• Important with new privacy regulations.
• Tokenization and Loyalty Programs:
• Tokenizing assets or creating more advanced, secure
• Fraud-resistant customer loyalty programs
• Reducing Paperwork and Costs
Case: Walmart’s blockchain quest: Integrating
new technology into a complex supply chain
• Q3: For which stakeholders other than suppliers should Walmart
demonstrate value via the blockchain technology?
• Employees
• “Exploratory research on the use of blockchain technology in recruitment” published
in Sustainability in 2022
• Increasing the speed and reliability of the transactions and reducing costs and routine
workload.
• Provides a sustainable competitive advantage to the companies.
• Customers
• “The impact of blockchain technology on the online purchase behavior of green
agricultural products” published in Journal of Retailing and Consumer Services in
2023.
• Blockchain technology and the information it discloses can induce trust in online consumers.
• The use of blockchain technology can enhance online consumption.
Case: Walmart’s blockchain quest: Integrating
new technology into a complex supply chain
• Q3: For which stakeholders other than suppliers should Walmart
demonstrate value via the blockchain technology?
• Investors
• "Blockchain announcements and stock value: a technology management
perspective" published in International Journal of Operations & Production
Management in 2023.
• Blockchain technical innovation announcements exhibit a more positive
market reaction towards the announcing companies
• Regulators
• Local Communities and Society at Large
Case: Walmart’s blockchain quest: Integrating
new technology into a complex supply chain
• Q4: If the blockchain technology reveals unsavory practices in
Walmart’s supply chain, how should the company react?
• Skinner (1994)
• "Why firms voluntarily disclose bad news?“
• Journal of Accounting Research
• Voluntarily disclosing bad news is better for the company
Walmart's Blockchain Journey
• 2016
• Announced that it was piloting a blockchain-based traceability system for leafy greens.
• The company partnered with IBM to create a blockchain-based system for tracking the movement of pork in
China.
• 2017
• Walmart expanded its blockchain pilot to include pork and shrimp.
• The company partnered with Dole, Kroger, McCormick, Nestlé, Tyson Foods, and Unilever to collaborate on
the use of blockchain in the food supply chain.
• 2018
• Walmart announced that it had successfully traced a mango from its origin to the store shelf in just 2.2
seconds using blockchain technology.
• The company partnered with KPMG to explore the use of blockchain in the drug distribution industry.
• 2019
• Walmart launched the Walmart China Blockchain Traceability Platform, which allows customers to scan a QR
code on a product to see its entire supply chain journey.
• The company partnered with Merck to explore the use of blockchain in the cold chain logistics industry.
Walmart's Blockchain Journey
• 2020
• Blockchain to track the movement of cotton in its supply chain.
• The company partnered with the World Economic Forum to explore the use of blockchain in the fight against
food fraud.
• 2021
• Walmart announced that it was using blockchain to track the movement of avocados in its supply chain.
• The company partnered with the University of Arkansas to research the use of blockchain in the agricultural
industry.
• 2022
• Walmart announced that it was using blockchain to track the movement of seafood in its supply chain.
• The company partnered with the Rainforest Alliance to explore the use of blockchain to help protect
rainforests.
• 2023
• Walmart announced that it was using blockchain to track the movement of electronics in its supply chain.
• The company partnered with the Global Shipping Business Network to explore the use of blockchain to
improve the efficiency of global shipping.
Group project
• 1. Identify a Business Sector: Each group needs to select a company of their choice specific business sector of their choice
that could potentially benefit from blockchain applications (e.g., supply chain, finance, healthcare, agriculture, real estate).
No two groups should choose the same company.
• 2. Conduct Interviews: Once the sector is identified, students are expected to conduct a series of interviews with
professionals in that field. This may include business owners, managers, or even employees. The aim is to understand
current processes, challenges, and any existing technologies in use. Students are encouraged to record interviews
(preferably video, with their consent) to ensure authenticity.
• 3. Identify Potential Blockchain Applications: Based on their research and interviews, students will propose how
blockchain technology could be integrated (or not) into the identified sector to improve efficiency, reduce costs, or solve
other identified challenges. Students should consider potential use cases, benefits, and also the obstacles for blockchain
implementation, such as technological constraints, cost, or regulatory issues.
• 4. Impact Assessment: Students should attempt to provide some analysis using some frameworks (e.g., TOE) that they
have learnt on the potential impact of the proposed blockchain solution.
• 5. Present and Submit the Case Study: The final step would be for each group to present their case study. They should
cover the business sector background, findings from their interviews, their proposed blockchain application, potential
impact, and anticipated challenges. They should be prepared to answer questions and defend their proposals.
Summary
• Types of blockchains
• Hyperledger Fabric
• Things to consider while implementing blockchain in a complex
supply chain
• https://www.supply-chain.ibm.com/