Blockchain characteristics and consensus in modern business processes

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Abstract

Blockchain technology has attracted a great deal of attentions as an effective way to innovate business processes. It has to be integrated with other Business Process Management system (BPM) components to implement specified functionalities related to the applications. The current efforts in integrating this technology into BPM are at a very early stage. To apply Blockchain into business processes efficiently, Blockchain and business process characteristics must be identified. Inconsistency of confirmation settlement that heavily relies on the implementation of consensus protocol poses a major challenge in business process operations, especially ones that are time-critical. In addition, validators, nodes responsible for performing consensus operations in a Blockchain system, can introduce bias and as a result are not trustable. This paper first defines Blockchain and also investigates the characteristics of Blockchain and business processes. Then, we suggest an architecture of business processes in Blockchain era to overcome the problems of time inconsistency and consensus bias. The architecture provides persistency, validity, auditability, and disintermediary that Blockchain offers. The architecture also provides flexibility by allowing business partner to select nodes in performing consensus; thus bias is mitigated.

Introduction

Over the past decades, consensus mechanisms have been extensively studied in a classical distributed system. After the success of Bitcoin [1], the first cryptocurrency appeared in early 2009, Blockchain technology has attracted attentions from academia and industry sectors [2]. Currently, the rise of Blockcahin applications spans across diverse range far beyond crytocurrencies, including insurance [3], medicine [4], [5], [6], economics [7], [8], [9], Internet of things [10], [11], [12], supply chain, software engineering [13], [14], [15], etc. The core element of any Blockchain application is its consensus protocol for reaching consensus of information sharing, replicating state, and broadcasting transactions, among participants. This has made the consensus mechanisms received revived attentions in recent years [16], [59]. There exists multiple implementations of consensus in decentralized settings, and some are still in their proposals.

The key properties of integrity, resilience, and transparency of Blockchain make it an attractive option to enterprises to revolutionize their business processes. With the growth and integration of modern technologies including Business Process Management (BPM), Service Workflow, Internet of Things (IoT), Cloud Computing, Service-oriented Architecture (SoA), and Cyber-Physical Systems (CPSs) in Industry 4.0, centralized BPM tools face their limits in meeting the conflicting requirements and trade-off of scalability, security, openness, trust, and cost [18], [19]. To survive in a competitive market, implementing flexible business processes in opened environments is unavoidable, as to promote collaboration, knowledge sharing, and collective decision [20], [40], [60], [64]. The advancement of the technologies provides a wide range of opportunities for automating, sharing information, and transforming businesses [21], especially when IoT devices are becoming prevalent [65]. From this perspective, the newly developed Blockchain technology can be integrated as an essential ingredient for business processes to alleviate the issues of security, distribution, openness, cost-effectiveness, and most importantly trust. With the application of modern technologies, the innovative business process termed business process 4.0 strives for the ultimate goals of interoperation, automation, trust, and transparency.

There are rapidly growing researches on theories and applications on Blockchain and consensus mechanisms. Prior works relevant to this area try to solve the fundamental agreement problem mainly exercised in Asynchronous Byzantine-related consensus exhibited in distributed systems [16], [22], which can explain as a system with n asynchronous processes that still ensure agreement on a single value despite having some faulty nodes. This field has been extensively studied in the distributed systems community for closed systems since the 1970s. At present, there is a slight shift on the landscape of how consensus is exercised.

  • 1.

    Now it relies heavily on a message-passing model where not all nodes are required to find a solution, but once proposed, it will be broadcasted to other nodes that can easily verify the correctness.

  • 2.

    System configurations can vary regarding the degree of centralization and openness. Private and permissioned Blockchains tend to be more centralized than public Blockchains, while information access is more opened in public Blockchain.

  • 3.

    Other economic and psychology parameters are incorporated such as in PoS-based consensus.

  • 4.

    Unlike closed systems usually exhibited in traditional distributed systems, Blockchain systems are more opened and lead to a plethora of new designs of consensus algorithms [23].

To study the effect of Blockchain and its consensus in modern business processes, we conduct a survey on consensus mechanisms exercised in distributed Blockchain applications in the field of business process 4.0 and then presents an architecture for consensus by incorporating the 2nd generation of Blockchain, smart contract, to be more flexible and better support user requirements. Thus, the paper makes the following contributions:

  • 1.

    We provide definitions and characteristics of Blockchains with respect to consensus mechanisms.

  • 2.

    We identify the relations of Blockchain and business process characteristics.

  • 3.

    We propose an architecture and guidelines for making consensus to be more flexible and reliable that better reacts to user requirements in the field of business process interoperation.

We believe that our architecture and guidelines will attract and encourage many researchers to implement effective consensus in solving time inconsistency and bias. In addition, the paper will serve as a good reference for and raise awareness of Blockchain researchers and practitioners to understand the relationship in adopting Blockchain the technology and consensuses in the context of business processes.

The remainder of this paper is organized as follows. Section 2 provides the definitions of Blockchain technology and consensus mechanisms. Section 3 identifies the classification of Blockchain systems and explains the characteristics and relations of Blockchain and business processes. Section 4 introduces our architecture for applying Blockchain technology to business processes. Lastly, Section 5 concludes the paper.

Section snippets

Definitions

Across most current researches, how Blockchain is defined is informal, mostly described specifically to the context of use and using some marketing words in terms of properties Blockchain offers or how security can be attained. These include, for example, a public ledger for recording transactions maintained by many nodes without central authority through a distributed cryptographic protocol [16]; a decentralized database with the ability to operate in a decentralized setting without relying on

Blockchain and business process characteristics

The purpose of this section is to identify general characteristics and the relations between Blockchain and business processes. The relations and analysis of these two will be discussed along the way in the following subsections.

Architecture for Blockchain consensus in business processes

There exist multiple consensus protocols in asynchronous environment like the Internet. The selection of a consensus depends on assumptions and requirements of a system to be implemented. In the context of business processes, what we have to concern about selecting a consensus is the time used for transactions to be confirmed, known as transaction finality. However, FLP impossibility suggests that only two from three properties can be achieved in a distributed and asynchronous setting. This

Conclusion

Blockchain technology has revealed its great potential to innovate business processes. The properties of persistency, validity, auditability, and disintermediary that Blockchain offers can greatly improve modern business processes to achieve digitalization, automation and transparency. However, efforts spent for integrating Blockchain into business processes is still at infancy. This paper takes an initial step to define Blockchain and investigates the characteristics of Blockchains with

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