Are you skeptical about blockchain? I’m not surprised.

For a technology that got its start as the infrastructure that underlay the bitcoin cryptocurrency and then blossomed into a Libertarian’s dream of a decentralized transaction platform that would take down the modern financial world, blockchain has had its share of hype, scams and other nonsense.

However, if we pare away all the silliness and radical politics, a core set of innovative technologies come to light. At its heart, a blockchain is an immutable, secure ledger. Every time anyone writes a record or “block” to a blockchain, it’s there to stay – and no one can change it.

Immutable data stores are nothing new, of course. “Write once, read many times” or WORM technologies date from the 1980s or before. What’s different with blockchain is the notion of distributed consensus.

There are many blockchain technologies with a plethora of confusing consensus mechanisms – and this confusion only adds to blockchain’s reputation as being inappropriate for business use. But at its core, distributed consensus means that all parties in a transaction see the same transaction, and they have a cryptographically secure means for verifying it.

Immutability, after all, is only as good as the technology that supports it – and if one party offers some immutable record, who’s to say if that party is on the level, or if no bad actor has compromised the party’s data store?

Such is the power of an immutable, secure ledger: Not only are completed transactions part of the permanent record, but every interested party can verify that their version of the truth matches everyone else’s. This central capability is why blockchain is such a powerful innovation.

The myth of decentralization

I discussed distributed consensus above, but in blockchain circles, a more common word than distributed is decentralized.

Distributed refers to an architectural approach. We’ve had distributed architectures for more than 30 years now, and modern cloud computing is the latest iteration of fundamentally distributed technology.

When blockchain fans uses the term decentralized, in contrast, they are referring to decentralized control – in other words, a blockchain where nobody is in control.

Such decentralization has proven impractical at best, dangerous at worst. In reality, some organization should be in control of any blockchain to ensure it meets its fundamental business goals and remains compliant with appropriate laws and regulations.

Welcome to the next generation of blockchain: Centralized Ledger Technology. With CLT, consensus is still distributed, but all parties can rest assured that some organization is responsible for ensuring transactions are legal and aboveboard.

CLT for supply chains

The value proposition of blockchains, and in particular CLTs, is particularly strong for supply chains and logistics networks.

Supply chain and logistics projects can be insanely complex, and the shared interdependencies among dozens of players in a given workflow require a lot of data, which would require all parties to maintain a current copy of all of these data — not very practical. CLTs by nature can offer a shared, immutable, agreed upon consensus version of these multiparty data.

However, challenges remain. Each CLT transaction represents a “block” written to the blockchain – and such blocks are far too coarse-grained to represent the level of detail in real-world supply chain transactions.

Boardwalktech solves this problem. Its CLT, the Boardwalk Digital Ledger, keeps track of data at the individual field level. In other words, Boardwalktech brings the benefits of immutability and secure distributed consensus to every value in even the most complex business transactions. (Disclosure: Boardwalktech is a current Intellyx customer.)

Supply chains are massive, global, amorphous and ever-changing decentralized economic networks. But to each node in a supply chain network, its immediate connections are seldom total strangers. They naturally want to share a level of trust with partners, with the ability to control the data each partner sees based on its role in the network.

Partners should be able to see the benefits every bit as well as the company recommending the blockchain adoption. This visibility and immutability are what they want in commerce to get fairer access and feedback, but this visibility and immutability must apply all the way down to the level of individual data fields.

The Intellyx take

There is no need to govern a trade network too tightly, since such governance can cause trusted collaboration partners to stay away. It’s important to drive adoption as much as any other key performance indicator in your business.

You also need to prevent the risk of simply creating another database that can be out of sync with the supply chain network – one that needs to be reconciled somewhere else.

Furthermore, don’t expect a public, decentralized blockchain to be appropriate for business purposes in the immediate future, because the issues of trust and performance for such technologies are not likely to be up to snuff in the foreseeable future.

If you use a blockchain to optimize some part of your supply chain, don’t do it because of the fear of missing out. Don’t do it poorly to avoid risk. Do it for business value. For many multiparty business workloads, a CLT is the key to achieving such value.

Jason Bloomberg, a leading IT industry analyst, author, keynote speaker and expert on multiple disruptive trends in enterprise technology and digital transformation, is founder and president of agile digital transformation analyst firm Intellyx. The firm publishes the biweekly Cortex newsletter, advises companies on their digital transformation initiatives and helps vendors communicate their agility stories. Bloomberg, who can be followed on Twitter and LinkedIn, is also the author or coauthor of four books, including The Agile Architecture Revolution.

Jason “JE” English is principal analyst and chief marketing officer at Intellyx. His coverage focuses on how agile collaboration among customers, partners, and employees accelerates innovation. Co-author of Service Virtualization: Reality is Overrated, he has advised and worked for companies including cloud computing platforms, blockchain networks, SaaS-based solutions, supply chain management, and interactive gaming and media. He can be followed on Twitter.

Image: Jason English/Intellyx