Smart Contracts: The Business Process Enablers for Blockchain

This article is the first in a series of articles exploring ‘Smart Contracts’ and how enterprises can benefit from their use. Here, Antonio delves into the basics of smart contracts for the enterprise and the types of smart contracts based on applications. Founder and CEO of Italian start-up Digital Business Innovation srl, Antonio is regarded as one of the top DX influencers on artificial intelligence, cyber security, digital transformation, the Internet of Things, and blockchain. He is an advisor and enterprise and public sector consultant and mentor to numerous startups

With so much being spoken and written about blockchain, the technology seems to be in danger of being misinterpreted by the general audience. For them, it’s no more a technology, but a one-man-band that can do anything – enable bitcoin, secure data, make a coffee and more!

Demystifying the common hype around blockchain, we can simply affirm that it is “just a database”, a secure, decentralized and transparent container of data that introduces a smart concept – link each data with the previous data using cryptography. So, each transaction is linked to the previous transaction via the hash algorithms that reduce the amount of data contained in the transaction to a single and fixed length string. This string is then added to the next transaction and recalculated creating the ‘chain’.

But here, we’re not exploring how blockchain works, rather we’ll delve into how it can be adopted in the enterprise business model to harness the many benefits that this interesting technology has to offer.

Since an enterprise is a complex set-up, it involves processes to connect people and their use of information for various day-to-day purposes. A process is a formal procedure used to fulfill a specific action or transaction. Sometimes the processes may only need coordination with people within the organization, and at other times these processes may require collaborating and partnering with other organizations for various business goals.

But, can transactions be secured using a database? No they can’t!

There needs to be a layer of “logic”, more precisely business logic to merge this data with the actions that people can take using it. And, Smart Contracts is this layer of business logic, which enables blockchain to support a business process fulfillment.