Blockchain spreads transaction data around

Blockchain makes it possible for companies to carry out transactions with one another without needing to bring in third-party verification services to validate that they were processed successfully. The technology is based on a distributed architecture in which the individual computer nodes all maintain complete copies of the transaction ledger. Instead of relying on a single, centralized database that can be hacked or corrupted, a blockchain network essentially functions as a distributed database.

The ledger in a blockchain is continually updated to keep data in sync across the nodes and ensure that transactions are properly reconciled. Transactions are transparent to everyone involved, but private blockchain networks enabled by Hyperledger Fabric and other enterprise frameworks are typically permissioned setups that restrict the participants and limit the nodes that must agree on transaction updates before they're committed -- a process known as consensus.

Blockchain employs secure mechanisms for reconciling data and guaranteeing its validity across all nodes, as well as cryptographic techniques to prevent transactions from being modified after they've been added to the ledger.

Although blockchain technology has been primarily used thus far to support the exchange of digital currency on public networks that are open to all participants, the concept of a shared, distributed ledger could potentially benefit any business activity centered on transactions requiring data records that need protection against invalidation or tampering, such as stock trades, land deals, financial arrangements and supply chain activities.

Hyperledger Fabric: Blockchain enabler

The framework that Oracle Blockchain Cloud Service is based on is available through the Hyperledger Project, which The Linux Foundation established in 2015 to advance cross-industry blockchain technologies. Hyperledger is an umbrella initiative made up of numerous smaller, discrete open source projects -- or subprojects -- that focus on specific frameworks and tools for use in blockchain implementations.

The most active of these subprojects is Hyperledger Fabric, a platform for building distributed ledger systems in private and permissioned networks. Nodes participating in a Fabric network must be enrolled through a membership service provider (MSP) component that abstracts the process of issuing certificates and authenticating users.

Fabric also makes it possible to create channels that control which transactions can be accessed by participants within a network. This is achieved by setting up ledgers for different groups of participants. Under this model, participants are granted access only to specific ledgers based on their group affiliation.

The framework is built on a modular architecture that is elastic and extensible, with plug-and-play components. For example, it can support different MSPs and store ledger data in multiple formats. In addition, consensus mechanisms can be switched in and out, enabling organizations to determine how transactions should be ordered and prioritized and how to handle bad transactions.

Inside Oracle's blockchain service

Oracle Blockchain Cloud Service provides the PaaS infrastructure necessary to implement a Fabric-based blockchain network in the cloud. That includes cloud computing resources, storage capacity, identity management tools, event streaming capabilities and other related functionality.

To control ledger access, the blockchain service utilizes Oracle's Identity Cloud Service, which provides single sign-on and key management tools. Using them, IT administrators can set up secure channels for conducting private blockchain transactions, including channels that isolate peers into subnets of participants with their own private ledgers.

Oracle Blockchain Cloud Service also provides a centralized web console for configuring and monitoring blockchain operations. Admins can use it to set up smart contracts, which are pieces of code that drive the business logic behind transactions. In addition, admins can provision and configure blockchain resources and add nodes to a blockchain network. They can also view the network topology and track the status of network components, as well as access channel and ledger metrics.

Not surprisingly, the Oracle blockchain service supports a wide range of other features and capabilities, such as on-demand scalability and high availability, as well as client-side software development kits for working with the service and REST APIs for integrating other systems.

The same potential benefits of cloud services, in general, apply to Oracle Blockchain Cloud Service: It can simplify and speed up the process of building a blockchain environment while saving on capital expenditures and long-term maintenance costs. Whether these savings are enough to offset the service's ongoing subscription fees is up to Oracle customers to evaluate and decide once they determine that they have a need for blockchain technology.