Dynamics 365 Business Central: Blockchain Basics

Dynamics 365 Business Central: Block-chain Basics

hey everyone thanks for tuning in. 

Today we're going to go into blockchain, so blockchain is a buzzword that's been going on for a while and it's entering the ERP sort of, of course, it was started out with Bitcoin and there were cryptocurrencies and now the other uses of blockchain have sort of surfaced and are being evaluated. 

But what I want to do just to start things out is talk about what blockchain is just if you're unfamiliar with it. So, what is blockchain? Basically a blockchain is network that stores data which is linked together so, you have these blocks which are going to be on a network and they're connected and they have two elements to them, so the first block in the network; which is the first data point in the network; contains no block before it, it's the first entry. So the address of the first block is going to be 0 and the address of I mean the previous block is there's no previous block but the address of the current block this block here, basically what the system does, it takes the size of this block whatever is contained in the data of this block and there's a mathematical algorithm and hashes out a long string which is the address of the block or basically the signature of the block. 

I'm going to call it AV052 it's going to be much bigger than that, it's a very long string but just for demo purposes and we're going to call it that. Now so this address is stored in the next block that comes onto the chain. So, it's it keeps a record of the previous block, that's how they're connected together and then this block or the new data element that comes in is of course a different size than this one, let's say this block contains our name like John and age let's say 30 nothing else, so when they hash this data to create this string, this is a string out of that hash. 

Now let's say this block contains Peter and 50, so Peter generates a different hash and that's going to be let's say Bf18C and that's going to be the hash of this data, which is the signature for this block and that is of course stored in the next block so Bf18C and then this could be Laura and I could be 28 and it could be Hx50. So this is how the blockchain sort of works, a construct of blockchain and it connects together. If you're into IT and you've done a lot of IT before you recognize this sort of like a linked list that actually links back as well. 

We just create this block chain all the way through, why is this such a revolutionary idea? it really isn't. What is important about blockchain is that every time you add to a blockchain a new element here, there is a proof-of-work that happens and it's called POW or proof-of-work algorithm and what that does, it actually goes over the blockchain and confirms that the consistency of the blockchain is correct, so that you cannot delete element out and the new element that is being brought in is consistent. 

This algorithm actually makes sure that everything is correct and that secures the blockchain, so people are not messing with. It's a good audit control, and this actually algorithm takes time so sometimes it takes ten minutes or is known to take ten minutes, which makes it blocks in maybe a little bit slow and that is one thing that's actually talked about, is blockchain is too slow to be used for certain situations, but the reason why it takes long is that the people cannot sort of change everything before the proof of work is done and therefore kind of fool the proof of work, or you know it slows down basically an attack on the system or makes it almost impossible to change. 

Another secure element about this is, let's say if this blockchain is kept in one network on one computer in one database or something like that. You can actually create your own block chains on Azure, you could create one like this and start using it and that's the whole reason what we're talking about it because it's available on Azure 365. 

There will be another network that keeps a copy of this, it has the exact same thing set up and when the proof-of-work algorithm is going through it also queries the other networks to make sure that everybody is consistent and if there are inconsistencies then it errors out the blockchain is broken and needs to be fixed. It doesn't allow the new entity to come in. 

Blockchain therefore is very secure it's distributed which means it's kept all over the place, it's sort of like the DNS for Internet like the domain name services, there's multiple servers all over the place there are big organizations like universities to take care of those servers and make sure that is fine. 

If we compare blockchain to DNS for example, the DNS is meant to make sure that the internet runs well or the web runs well, however and it's a single purpose that everybody kind of shares, we just want to be able to type in a domain name and it recognizes that it's an IP and on we go. 

However, with blockchain it's not really the same thing, blockchain, each and every Blockchain  has a different purpose and is created for a different reason and so, one of the issues is that we haven't really gotten a list of independent providers coming together and maintaining the block chains or whatever blockchain with whatever purpose on a distributed scale.

For example, in food, Walmart just announced that everybody who is dealing with Walmart all suppliers have to now send information into their blockchain to make sure that the traceability is perfect and that they have until September of this year so that's a big announcement and they're committed to blockchain. They were working with IBM which has a blockchain set up to to get that going to get this effort in place.

Ee have then a blocked a generated for specific purpose which is food traceability and being maintained by a large entity like IBM, and they are probably partnering with other larger entities to create a distributed set up of the blockchain. In that case it'd probably be good, so we hope that. Obviously I could create a blockhain today, I could contain or ask people to send data into the blockchain but it might not necessarily be that secure because in the only one I haven't distributed out with other elements, so there are you know some notions of the block team that are going to be in question and that's one of the reasons why this has not become like a DNS, because DNS has one purpose which everybody agrees on.

Unfortunately back in the day when it was implemented people were very neutral so what we're going to do in the next video we're going to dive into Azure and actually create a blockchain and see how that works and we'll do some screen sharing on but for now we'll just digest this.