Akshat Bhargava (133065)

Karthic CM (133078)
MLBF End Term Project Priya Mishra (133093)
Anshika Agarwal (281011)
By Groups 8 & 12 Jaikrishnan Nair (281024)
Karan Arora (281026)
Application of
Blockchain in
Supply Chain
 Application of Blockchain in Supply Chain
Management

● Blockchain Technology : Introduction when 'Satoshi Nakamoto'

published a white paper on “BitCoin : A peer to peer electronic
cash system” in 2008
● Blockchain Technology Records Transaction in Digital Ledger
which is distributed over the Network thus making it incorruptible

Evolution of Blockchain

Adoption of Blockchain technology across the industries,

Blockchain 1.0 Blockchain 1.0 Blockchain 3.0 Blockchain 4.0 throughout the globe

Currency Smart Contracts DApps Making blockchain

usable in industry
Walmart adopts Blockchain in Food supply chain

Problems in Traditional food supply chain Application of Blockchain in food

process supply chain
Foodborne Illness
➔ Traceability
04
01 ➔ Commodity Management
➔ Marketplace Creation
Food Fraud

Production
Illegal ➔ Data sharing
Problems
➔ Access to capital
➔ Payments
➔ Insurance
03 02

Food Recall
Walmart Food supply chain Traceability

Why was it needed?

➔ When an outbreak of a food-borne disease does happen, it can take days, if not weeks, to find its source
➔ If investigators cannot point to a specific farm or farms, the government usually advises consumers to avoid products
grown in a certain area (as happened with romaine lettuce from Yuma, Arizona), or even to avoid the type of product
altogether
➔ Millions of bags or heads of lettuce had to be removed, and consumers lost confidence in romaine lettuce altogether

Walmart’s Move :
➔ Realized the importance of Blockchain; From centralized to decentralized (shared ledger concept)
➔ Started working on two proof of concept (POC), i.e., Pork in China and Mangoes in USA
➔ Technology partner: IBM; Hyperledger Fabric was implemented
HYPERLEDGER FABRIC

● Hyperledger Fabric is an open source enterprise-grade permissioned distributed ledger technology (DLT)
platform, designed for use in enterprise contexts, that delivers some key differentiating capabilities over
other popular distributed ledger or blockchain platforms
● It leverages container technology to host smart contracts called “chaincode” that contain the business
rules of the system
● Fabric is an extensible blockchain platform for running distributed applications. It supports various
consensus protocols, so it can be tailored to different use cases and trust models
● Fabric runs distributed applications written in general-purpose programming languages without depending
on any native cryptocurrency
● Fabric also can also create channels, which enable a group of participants to create a separate ledger of
transaction
 HYPERLEDGER FABRIC ARCHITECTURE

1. Ordering service
2. Membership service
provider
3. Smart contracts
4. Endorsing peers
5. Channels

Consensus in Hyperledger Fabric is broken out into 3 phases : Endorsement, Ordering, and Validation

● Endorsement is driven by policy (eg m out of n signatures) upon which participants endorse a transaction
● Ordering phase accepts the endorsed transactions and agrees to the order to be committed to the ledger
● Validation takes a block of ordered transactions and validates the correctness of the results, including checking
endorsement policy and double-spending
Consensus in Hyperledger Fabric
1 2 1.Propose Transaction

2.Execute Proposed
Transaction

3.Proposal Response

Hyperledger Validating Peers (VPs) do not mine blocks and do not share the blocks
3
between them

● A transaction is send to one trusted VP.

● The VP broadcasts the transaction to all other VPs.
● All VPs reach consensus (using PBFT algorithm) on the order to follow to
execute the transactions.
● All VPs execute the transactions "on their own" following the total order and
build a block (calculating hashes mainly) with the executed transactions
 Consensus in Hyperledger Fabric
4 5 4.Order Transaction

5.Deliver Transaction

6. Validate Transaction

6. Notify Transaction

6 7
POC : Proof Of Concept HOW IT WORKS?

● In October 2016, Walmart, together with its technology

partner IBM, announced the two projects
● One was about tracing the origin of mangos sold in
Walmart’s US stores and the other aimed to trace pork sold
in its China stores
● With the conventional system at Walmart he team had to
call and email distributors and suppliers to trace the origin,
and was able to locate the source in 7 days
● Walmart and IBM worked on a blockchain-based food
traceability system build on the Hyperledger Fabric

● Walmart worked with GS1 (the standards authority in barcodes and labeling) to define the data attributes for
upload to the blockchain. IBM wrote the chaincode
● Suppliers used new labels and uploaded their data through a web-based interface
How Successful was the Application : The Results
● This solution allowed the company to see the whole chain in seconds. They could take a jar of baby food
and see where it was manufactured and trace back all the ingredients to the farms!
● Walmart plans to roll out the system to more products and categories in the near future in cooperation
with IBM Food Trust
● Using the network that relies on blockchain technology, Walmart discovered that they can reduce the
amount of time it takes to track a food item from a Walmart Store back to source in seconds, as compared
to days or sometimes weeks
● Beyond tracing the products’ journey, the company can also started tracing other data, like sustainability
● The Hyperledger Fabric blockchain-based food traceability system built for the two products worked. For
pork in China, it allowed uploading certificates of authenticity to the blockchain, bringing more trust to a
system where that used to be a serious issue. And for mangoes in the US, the time needed to trace their
provenance went from 7 days to 2.2 seconds!
How Successful was the Application : The Results
● Walmart now traces over 25 products from 5 different suppliers using IBM Blockchain which is
built atop Hyperledger Fabric
● The products include produce such as mangoes, strawberries and leafy greens, meat and poultry
such as chicken and pork, dairy such as yogurt and almond milk, and even multi-ingredient
products such as packaged salads and baby foods
Application of
Blockchain in
India
Blockchain in India : Introduction
➔ Blockchain is seeing a lot of traction within India
majorly in Banking, Insurance and Cards industry
➔ In most of these industries, players are coming
together to form a consortium to realize the
benefits of Blockchain at an industry level
➔ A lot of Indian players have tested usage of
Blockchain in the areas of Trade Finance, Cross-
border Payments, Bill Discounting, Supply chain
financing, Loyalty and Digital Identity areas
➔ Some of the Indian banks, business conglomerates,
and one stock exchange are among the pioneers for
exploring Blockchain in India
Case Study: Cube Wealth
➔ Case Study by Talentica
➔ Client: Cube Wealth
◆ Founded in 2016
◆ Mobile Banking Application
◆ Product Offering: Banking service on
app/cloud that automates user wealth, expenses,
payments, documents, and philanthropy
◆ Product USP: Simplification, automation and
real time information movement with high
security, using blockchain
➔ Challenges:
1. Building trust with users & Banks
◆ Protect identity and personal data of users
◆ Create trust with banks and billers to share data
2. Reducing Transaction Friction
◆ Get near instant processing, eliminate paperwork
◆ Reduce costly and repeat Know Your Customer
(KYC) processes across service providers
◆ Real time settlement with banks and billers
Our biggest challenge was to Implement a solution that will
keep it future ready and still relevant in the existing market. -
➔ Manjusha
Solution:Madabushi
Blockchain(CTO, Talentica Software)
◆ Security, Cost of Transaction, Settlement Time
➔ Decisions:
◆ Selecting the right blockchain technology
◆ Securely storing the KYC data
◆ Keeping it future ready
 Multichain Blockchain
Permissions
(connect, send and receive) Users who
obtain them can only connect to the
blockchain and transact on their own
behalf
(issue, create and activate) Users who
obtain them can respectively issue assets,
create streams, and manage another user’s
low risk permissions
(issue, create and activate) Nodes with
mine permissions participate in the
consensus algorithm, while those with
admin permissions can modify all other
permissions for users
Private Network
● Extended open source fork of
Bitcoin.
● Used to launch custom
blockchains, both private
and public and is easy to
configure
● Well-selected set of features
and enhancements targeted at
enterprise and business users
Supports multiple Assets
● Every MultiChain node tracks and
verifies the quantity of assets in
transactions
● It checks that the total quantities of
all assets in a transaction’s outputs
are exactly matched by the total in its
inputs
● In MultiChain, assets can be referred
to in any three ways:
● An optional asset name, chosen at
the time of issuance.
● An issuetxid, containing the txid of
the transaction
● An assetref which encodes the block
number and byte offset of the
issuance transaction
Multichain Blockchain (Tune Consensus Parameters)
Parameter Description Default
setup-first-blocks Length of initial setup phase in blocks 60

mining-diversity Minimum proportion of permitted “miners” required to participate in the round-robin scheme to 0.3
render a valid blockchain

admin-consensus-upgrade Proportion of permitted administrators who must agree to upgrade a blockchain protocol 0.5

admin-consensus-txfilter Proportion of permitted admins who must agree to activate or deactivate a transaction filter 0.5

admin-consensus-admin Proportion of permitted admins who must agree to modify the admin privileges for an address 0.5

admin-consensus-activate Proportion of permitted admins who must agree to modify the activate privileges for an address 0.5

admin-consensus-mine Proportion of permitted administrators who must agree to modify mine privileges for an address 0.5

admin-consensus-issue Proportion of permitted admins who must agree to modify asset issuing privileges for an address 0.0
Mining in Multichain
● Only Permitted Miners
● MultiChain implements this scheme using a
parameter called mining diversity, which is
constrained by 0 ≤ mining diversity ≤ 1
● The mining diversity parameter defines the
strictness of the scheme
● In a MultiChain blockchain, transaction fees and
block rewards are zero by default.
Source - https://www.multichain.com/download/MultiChain-White-Paper.pdf
● The validity of a block is verified as follows:
1. Apply the changes in permissions set by
transactions and block respectively
2. Count the number of permitted miners who
are defined after applying those changes.
3. Multiply miners by mining diversity,
rounding up to get spacing.
● This enforces a round robin schedule, in
which the permitted miners must create
blocks in rotation in order to generate a valid
blockchain
Consensus Mechanism Followed
The Proof of Work Consensus (PoW)

● In Blockchain Proof of work ensures mining diversity by making it computationally difficult

(and therefore costly).
● Miners are not rewarded in Multichain
● Alternatively miners charge network participants a fixed annual service fee, paid by traditional
off ­blockchain means

Source - https://www.multichain.com/download/MultiChain-White-Paper.pdf
● As in Multichain, the transaction fees and the Block incentive is null by default. However,
you can name these value in the params.dat file.

This file encloses the whole configuration like:

1. The protocol of the chain.
2. Target time for the block.
3. Active permission type.
4. Mining diversity.
5. Mining incentive.
6. Approved type of transaction.
7. Maximum block size.
8. Maximum meta data per transaction.

Source - https://www.multichain.com/download/MultiChain-White-Paper.pdf
 Storing KYC Securely

Maintaining KYC using Offering Custom key based

Custom Key search

Banks/ Financial Institutions Most of the blockchain

maintain Know Your Customer technologies don’t provide
(KYC) data using custom key custom key based search. We
with different attributes like had a choice of building a layer
customer id or one of the on top of blockchain with index
identification number. KYC primary search key with
Distributed blockchain ledger for transaction hashes and also sync
storing KYC data reduces costly Saving development time the layer with other nodes
and repeat KYC process across similar to the way blockchain’s
Multichain natively supports searching with blocks get synced.
service providers for various use
custom key. Using this newly added feature,
cases.
we built our KYC storage system on top of
Multi Chain quickly.
Success Story!!

➔ Cube Wealth has raised half million dollars (over

Rs 3.5 crore) led by founder Satyen Kothari and
Singapore based venture fund Beenext and Japan
based Asuka Holding amidst a pandemic
 References
● https://www.hyperledger.org/learn/publications/walmart-case-study
● https://www.hyperledger.org/learn/white-papers
● https://www.ibm.com/downloads/cas/EX1MA1OX
● https://bit.ly/2RCGcnG
● https://bit.ly/3iF369K
● https://www.multichain.com/developers/permissions-consensus/
● https://bit.ly/2RCG4Ve