Learn the Benefits of Blockchain

Learning Objectives

After completing this unit, you’ll be able to:

  • Explain what blockchain is.
  • Explain the benefits of blockchain.


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The Case for Blockchain

By 2025, there will be more than 75 billion Internet-connected devices worldwide. This level of connectivity means massive amounts of data will be created. 

For businesses to thrive in this new world, they must integrate into a connected and trusted ecosystem where such data can be shared securely with everyone they work with—not just partners, but also industry peers and regulators. The success of a business will depend on how they can easily, securely access and share data privately and ethically.

But this level of trusted data integration is not easy. Today data is stored piecemeal. Different data lives within different organizations. This results in inefficient, inconsistent, and unsafe handling of data. It also makes it harder to conduct audits and creates delays in response and duplication of data. 

Ultimately, these cross-company data silos can erode trust. 

Blockchain enables new ways of sharing data across a network of organizations. It’s a type of a database that helps businesses create a new, trusted architecture where they can more reliably and securely share data with different partners and keep track of it. 

Salesforce is riding the wave of this new technology. We’re making it fast and simple for our customers to create trusted blockchain networks to securely collaborate and share CRM data with partners—sales and service partners, industry peers, regulators, and more.

Before we get into that, let’s discuss the basics of blockchain technology. 

How Does Blockchain Work?

Blockchain is a new kind of a database that tracks data in a way that is secure, transparent, and traceable. 

The secure part comes from how blockchain saves data. It encrypts and hashes every change made to the data in a linked set of blocks that are hard to tamper with. Data is not written over, instead, it becomes a new block on the chain—hence the name.

The data doesn’t live in one central place, nor does a super-admin manage it. Instead, it’s shared with a network of partners, each with a copy of the database. The partners work together to transparently define the rules of the network—things like what constitutes an official change to the data and what the role of each partner on the network is. 

For example, the rules can state that the only time the data can be modified is when a majority of the network participants agree that the modifications have been verified and come from the right source and in the right format. Only after that happens will the data get updated and reflected on the blockchain for all partners.

Every change is saved onto a blockchain in a way that is easily traceable and visible to anyone who needs to see or act on that data. This setup reduces the chance of errors, increases integrity, and enables real-time visibility to data and how it changes over time. 

Blockchain as a Solution

When you buy a used car, you cannot always verify your car’s history. How can you determine if the parts are truly authentic? The dealership can claim they are, but is there uncompromised documentation to back that up? 

You can find dealerships that serve as a central authority, providing a certified history for cars. But who entered and tracked all that information? You can’t be sure that information hasn't been compromised. You just have to trust that you are getting accurate and up-to-date information about your car’s service and parts replacement history. 

Now let’s talk about Electron Motors. It’s a fictitious car company that has a reputation for durable cars. The company wants to make sure that the used cars they sell remain reliable and get high ratings when it comes to quality. To maintain this kind of quality, Electron Motors decides it must only install authentic and reliable parts in all of its cars. So how can the company ensure this?

Create a Network

To capture and verify the changes to the car’s parts, Electron Motors’s IT team initiates the creation of a trust network and adds the following participants.

  • Electron Motors’s database with its IoT sensor data.
  • Authorized dealerships that service its cars.
  • Authorized repair shops that provide original parts.

Electron Motors then sets up the network rules and permissions for the identified partners—on how they can interact with the blockchain database (the ledger). All partners get permissions to view and update the database. Alternatively, Electron Motors can work together with the network to jointly decide on these rules. This is what makes it a shared and trusted network. 

Create Blockchain Data Model

Next, the team creates the blockchain data model, shared with the network, to capture every repair and modification done to the car. To capture the change of parts automatically, Electron Motors adds IoT sensors to the car so that every time a part is removed, it triggers a notification to let its network know. Using predefined rules, the network detects this change and determines whether the modification can be accepted. 

Create an App for Blockchain Data Input

The blockchain is only successful if the partners use it. So Electron Motors builds a mobile app that partners can download and use via mobile. This makes it that much easier for partners within the network to input data and engage with the blockchain. Partners submit updates by inputting the car’s ID and recording the part replacement information.

Blockchain in Action

Now that the blockchain is set up, anytime authorized partners make a change to the car (add new parts, service it, and so forth), they are required to scan the QR code that is only available on the authentic car parts. This is the type of information that can be verified and is stored on the blockchain database. 

Now let’s say a repair shop replaces parts, but doesn’t scan the QR code, then the network sees that the QR hasn’t been entered while replacing the part. As a result, the network rejects the update. In this scenario, the network notifies Electron Motors. The company sends a notification directly to the car’s dashboard with a message letting the owner know that the replaced part is not authentic. The notification warns the owner that this non-original part installation is being recorded on the immutable blockchain ledger and will be visible to all future buyers, which can decrease the market value of the car. 

That’s a good incentive for the owner to do business with dealers that provide only true car parts.

Create an App for Customers to View Blockchain Data

How does Electron Motors share this trusted view of repair history with customers? Customers looking to buy a new car from Electron Motors can view its blockchain ledger in an app and search information about car parts. 

Blockchain vs a Traditional Database

Now that you have a better understanding of how a blockchain works, let’s talk about the benefits of it. 

Lower cost: With a traditional database, creating unique integrations with each of these organizations is costly and not scalable. With blockchain, every time a partner is added to the network, it is a uniform process for everyone and makes it less costly. This is because instead of building integrations, you are just adding partners who can easily access the database with their own key.

Trusted verification: The entire blockchain network serves as a mechanism to automatically verify instead of putting the power in the hands of a central administrator. This leaves little room for error.

Immutability: Once data is saved, it can’t be modified and is immutable. That provides a level of trust in technology that a traditional database doesn’t offer.


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