## 2 Literature Review and Exploration of Concepts
### Literature Review and Technological Background
Figure 2: Traditional centralized database. a balance between data protection and disclosure. When tested, the proposed methodology showcased its potential to enhance security, traceability, and efficiency in the supply chain, making it a significant contribution to blockchain applications in healthcare supply chain management. In the realm of agricultural supply chain management, the paper titled \"Agriculture Supply Chain Management Based on Blockchain Architecture and Smart Contracts\" offers a perspective on the application of blockchain in the agricultural supply chain management domain. The authors emphasize the inherent challenges of the traditional agricultural supply chain, such as its lack of transparency, inefficiencies, and susceptibility to fraud. The paper introduces a blockchain-based solution to address these issues, leveraging the Ethereum platform. This decentralized approach ensures enhanced traceability, transparency, and security throughout the supply chain [10]. Furthermore, integrating smart contracts automates various processes, reducing manual interventions and potential errors. Such a system streamlines operations and fosters trust among stakeholders, from farmers to consumers. Smart contracts, as electronic transaction protocols, are designed to digitally facilitate, verify, or enforce the negotiation and execution of the terms of underlying legal contracts. These contracts aim to fulfill perpetual conditions, such as payments, legal obligations, and enforcement, without the need for third-party intermediaries. By leveraging blockchain technology for distributed databases, smart contracts seek to reduce transaction costs, including arbitration and enforcement costs [11]. However, the potential of smart contracts extends beyond cost reductions for these transactions. They can facilitate the cross-organizational business processes characteristic of smart supply chains. A significant number of smart contract applications in the business realm are associated with supply chain management, the Internet of Things (IoT), and Industry 4.0 solutions. This paper, based on expert interviews, surveys, and case studies conducted in the context of EU projects focusing on the Baltic Sea Region, explores how smart contracting and blockchain technology can aid in the implementation of collaborative business structures for sustainable entrepreneurial activities within smart supply chains. Another differentiating specification is that this approach stores all data related to the processes and transactions in the Ethereum Virtual Machine (EVM) via memory. All structs, mappings, arrays, and other primitive type definitions are stored in-chain with their values. These data include the participant information, product information, product health status in transit, product history, participant history, return history, and balance sheets. Four approaches can be taken in the data storage for smart contracts: you can entirely offload your data to external sources, you can use IPFS and hash for storing your data in a decentralized way outside of the chain, you can use a mixture of them via storing some data on-chain and some of them off-chain, or you can entirely store all your data on-chain. In this implementation, entirely-on-chain data storage is chosen both for fully utilizing the data protection aspects of blockchain, such as SHA-3 encryption, 100% up-time and hacking prevention due to the distributed network principles of it, and for providing a never-impaired transparency and traceability for the data stored in the chain. This approach of storing data on-chain costs more than other data storage options, but these cost increases can be mitigated via the utilization of local blockchain networks or using sibling networks of Ethereum that take much lower transaction fees [12] when we convert it to fiat money. The framework applied in this study also implements a bidirectional flow to the supply chain management implementation for returning goods that are somehow faulty or not needed anymore.