Supply Chain Virtualization: Facilitating Agent Trust Utilizing Blockchain Technology

Abstract

In this chapter, through the lens of information security, we discuss the use of blockchain technology as a mechanism for facilitating trust between various supply chain agents. The goal is to explicate the use of blockchain technology as a distributed ledger to mitigate a varied set of risks to supply chain virtualization, whereby various agents within the supply chain context can engage in transactions with an immutable and cryptographically secure record. This immutable and secure record would then serve as the foundation of a mutually beneficial relationship, built upon the blockchain technology, by engendering greater trust among supply chain agents. The usefulness of blockchain technology is such that it enables information to be stored using a cryptographically secure hash and be distributed among multiple record-keeping nodes. Each agent within the supply chain context can act as a node and, by maintaining a copy of the record, create a distributed ledger of information. This provides two distinct benefits that facilitate trust among agents within the supply chain context; first, agents acting as nodes within the blockchain possess a copy of the information record, which cannot be altered without their consent. Second, information is stored on the blockchain using a secure method of encryption that provides protection against tampering from malicious sources and security of the information contained on the chain. Therefore, these two benefits of blockchain technology provide supply chain agents with powerful trust-building mechanisms, which extricate fear and allay concerns when interacting with new or unknown agents.