**3.2 What is a "smart contract"?**

The term "smart contract" was first proposed by Nick Szabo, and defined as "a set of promises, specified in the digital form, including protocols within which the parties perform on these promises" [36]. The smart contract concept was integrated into Ethereum's blockchain network to facilitate, verify, and enforce contract negotiations and to improve the contract performance. Before transactions are conducted in a blockchain network, a smart contract that defines the conditions,

**Figure 3.** *Data flow of an open blockchain network [27].*

obligations, rights, and concepts between stakeholders is created. This information is recorded as executable computer code to reduce ambiguity. Smart contracts are stored and shared in a distributed ledger that all participants have access to. These contracts automatically self-execute when all of the pre-set conditions are satisfied within a blockchain network. Thus, stakeholders who agreed upon a smart contract have more trust for each other and have a reduced risk of error and fraud [37]. The following details additional advantages of smart contracts:


### **3.3 Existing blockchain platforms and applications**

There are many blockchain platforms with different consensus algorithms, development tools, and programming languages [38]. We introduce a few important blockchain platforms and applications herein.

**Bitcoin**: The initial and most famous blockchain network to offer cryptocurrency transactions. It was launched in 2009 and has rapidly grown to be a significant currency system both online and offline. Since the mid-2010s, increasingly more businesses have begun accepting Bitcoin as payment. At the time of this writing (March 2019), the market capitalization of Bitcoin was about \$68 billion [39]—it takes around 10 minutes to create a new block [40].

**Ethereum**: An open-source blockchain platform that was introduced by Buterin [41] and first launched in 2015. It is the first, and possibly the most advanced, blockchain network to introduce smart contracts for decentralized applications (Dapps). The primary Ethereum network serves as a public blockchain network; however, it is also possible to create a private blockchain network based on Ethereum. Quorum [42] is one such example and deploys the Ethereum network to create an enterpriseready distributed ledger and smart contract platform, both of which contribute to faster processing. In Ethereum's main network where a majority of transactions take place, it takes about 10–15 seconds to create a new block [43]. However, the number of transactions processed per minute is still as limited as Bitcoin.

**Hyperledger fabric**: An open-source, private blockchain network that is designed for enterprise applications. Hyperledger Fabric was established under the Linux Foundation and is maintained by a variety of organizations [44]. It employs a configurable architecture that provides various features, such as distributed ledger frameworks, smart contract engines, pluggable consensus protocols, user interfaces, and more. These versatile characteristics allow for a broad range of business applications, including finance, insurance, supply chain, healthcare, and human resources.

**Skuchain**: A blockchain network that is designed for enterprise supply chains in global trade [45]. It creates a zero-knowledge collaborative platform for global

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*Deploying Blockchain Technology in the Supply Chain DOI: http://dx.doi.org/10.5772/intechopen.86530*

defense industry [47].

**4. Chain integration**

**4.1 Benefits to supply chain**

technology benefits the supply chain:

machines [48].

supply chains and provides precise control in inventory procurement across all

**Sweetbridge**: A blockchain-based application that enables real-time financial systems to assure transactional data are trustworthy between different parties. It integrates trusted identity, smart legal contracts, smart accounting, and payment

**Zervnetwork**: A decentralized trading platform based on blockchain technology. It aims to provide frictionless transactions among all participants within the

**IOTA**: An open-source distributed ledger that is being built to power the future of the Internet of Things (IoT) with feeless microtransactions and data integrity for

In recent years, Blockchain technology has been recognized as a critical technol-

ogy with inherent capabilities to dramatically improve supply chain efficiency [49–51]. A study from Eye for transport stated that more than 16% of the 300 companies surveyed agree that data interchange, tracking, and visibility are the foremost reasons to deploy blockchain technology in the supply chain [52]. However, we discuss the benefits, challenges, and risks of integrating blockchain technology in

The adaptation of blockchain technology can significantly alleviate or even eliminate the aforementioned problems in today's supply chain. Blockchain technology empowers the supply chain with improved efficacy, efficiency, and transparency and reduced transactional time and cost. There are many ways blockchain

**Advanced traceability**: With the adoption of blockchain technology, traceability within the supply chain is greatly improved; it produces a fully auditable trail of all items flowing through the network. Combined with IoT-based devices, such as RFID technology, a blockchain-enabled supply chain can automatically collect the item-level data of massive quantities of products in real-time. Additionally, this information is associated with timestamps and collection locations to form an audit trail that is complete, accurate, and easy-to-access, from the product's origin to the customer. Furthermore, thanks to the immutability of blockchain data and the digital signatures required to confirm information ownership, data stored in this chain offers a secure and full history of any item in the entire supply chain. In the event of a compromised product, improved traceability enables the source of the issue to be identified more quickly, which reduces the cost of recalling products and improves disruption resolution between stakeholders. Advanced traceability gives stakehold-

ers and customers more confidence in a product's authenticity and quality.

**Improved transparency**: Blockchain technology provides reliable identity management in the supply chain [53] by enabling all parties to know who is performing what actions, at what time, and where. This information is stored and shared in distributed ledgers that can be conveniently accessed by involved and authenticated stakeholders. Through the integration of physical and digital flows across the supply chain, the connectivity of multiple trading partners will improve [54, 55]. Therefore, a blockchain-enabled supply chain with its transparent and complete inventory of product flow helps businesses make better forecasts and

partners, reducing friction and the costs of supply chain processes.

rails into a transaction for all parties to see in real-time [46].

the supply chain and introduce several pilot initiatives below.

*Deploying Blockchain Technology in the Supply Chain DOI: http://dx.doi.org/10.5772/intechopen.86530*

supply chains and provides precise control in inventory procurement across all partners, reducing friction and the costs of supply chain processes.

**Sweetbridge**: A blockchain-based application that enables real-time financial systems to assure transactional data are trustworthy between different parties. It integrates trusted identity, smart legal contracts, smart accounting, and payment rails into a transaction for all parties to see in real-time [46].

**Zervnetwork**: A decentralized trading platform based on blockchain technology. It aims to provide frictionless transactions among all participants within the defense industry [47].

**IOTA**: An open-source distributed ledger that is being built to power the future of the Internet of Things (IoT) with feeless microtransactions and data integrity for machines [48].
