Supply Chains and Hedera Hashgraph: Why We Use HCS
By: Kent Makishima
Tags: Manufacturing, Distributed Ledgers, Supply Chain, Blockchain, Hederahashgraph

The 3 “S’s”: Speed, Security and Support

Before deciding on Hedera Hashgraph, I considered several layer 1 blockchains including Ethereum and EOS. DLT was to be used for Armada’s shared data layer, for validating and auditing data in order to establish the base for features like track & trace. The DLT architecture we chose needed to to satisfy three key points: speed, security and support.

Speed is a common metric that is thrown around the industry, and is commonly related to the security and scalability of the technology. Bitcoin and Ethereum’s proof of work is abysmally slow compared to current centralized systems (although Ethereum’s Istanbul fork shows some promise) Hedera demonstrated 10k+ TPS, albeit specifically its micropayment service, and quick finality presenting an attractive option for the amount of data which would flow through the Armada Platform.

Security is a second common comparison between distributed ledger technologies, mostly around consensus algorithms and finality. Aside from being Asynchronous Byzantine Fault Tolerant, the Hedera Hashgraph gains stability from the council structure and decentralization of nodes. While data security is an essential aspect in any decentralized technology, stability is equally important for our clients’ enterprise supply chains.

Support is related to the ecosystem of the technology. For example, Ethereum has a great developer community, proven standards and support from organizations both ETH-specific(Consensys) and recognized names(JPM). While Hedera Hashgraph at the time was still a nascent ecosystem, it meant building great connections with early like-minded adopters and Hedera. The Hedera Governing Council demonstrates support from significant corporations around the world. Additionally, Hedera uses a solidity engine for smart contracts, which indirectly ties in the benefits and resources of the Ethereum solidity community.

This is a concise explanation of why we chose Hedera, and if interested further, I would be happy to chat.

The Cutting Edge: Hedera Consensus Service

Hedera Consensus service offers the pros of public DLT consensus to private applications. From the HCS Whitepaper:

“The Hedera Consensus Service is the first Distributed Ledger Technology (DLT) network service to provide solely the validity and order of events and transparency into the history of events over time without requiring a persistent history of transactions. As a result, the Hedera Consensus Service provides these benefits of a fast, fair, and secure consensus at a lower cost than any other public distributed ledger network.”

If you are familiar with Kafka, HCS uses a similar topic driven system, where information is organized into topics which data can be published or consumed from. It has the added benefit of validation of the published data through public distributed consensus, allowing trusted consumption.

For those unfamiliar, I like to compare HCS to a public newsfeed, it enables users to post data which can be subscribed to by other users. What makes it not just a public newsfeed, is that it offers fair ordering to transactions and is tamper proof. Fair ordering enables transactions to be posted in the correct order received, mitigating validation influence which could favor ordering certain transactions before others. This is essential for marketplace applications or time sensitive data. The ability to validate data comes from the mirror nodes, where data is replicated amongst different nodes. Mirror nodes allow consumption of data from HCS but also provides a distributed auditing system to check manipulated data.

Transaction ordering process from HCS Whitepaper

Ultimately, this is a data messaging service with a public distributed consensus backbone.

HCS is an essential part of our stack, and supports the unique features on the Armada Platform as a constituent of our distributed data architecture. All data transactions are processed through HCS to create a verifiable history of all transactions, conditional flows and automation on the platform, without the need for heavy smart contracts. The topic system allows us to easily organize related supply chain information, and manage permission and encryption.

A key feature on Armada is the ability for users to audit all data on the Armada Platform. HCS and mirror nodes makes this possible as any data can be validated with the data stored on mirror nodes and that which is available on Armada. For security, the Armada Platform encrypts all data on HCS using enterprise grade cryptography. This protects data from being viewed by non-permissioned parties as it is on the public ledger.

Originally, the Armada Platform uses the micropayment service of Hedera to submit data to the public ledger (podcast here). This allowed us to create a similar service to HCS, however we have replaced this with the actual HCS.

In short, HCS provides a proven infrastructure for data veracity required by our shared data layer to support our clients’ collaborative supply chains.

What’s Next?

We at Armada Chain hope to help grow both the supply chain and Hedera Hashgraph community. We are currently configuring Open Waters to be a simple, yet effective tool for people building supply chain applications. Developers can easily integrate HCS while utilizing the encryption standards and management from Armada. When building on Open Waters, it is easy to integrate with the Armada Platform, allowing companies to connect their services, like analytics or trade finance, to other Open Waters or Armada users. This is the basis of the interoperability that we are trying to create, and in the future, create bridges to other Hedera and DLT ecosystems like Fabric.

In general Armada Chain news, we are preparing for our POCs and continuing discussions with pipeline clients. We are currently looking for additional POC partners in manufacturing and logistics. We have had discussions with a variety of industries including retail, healthcare and automotive on provenance and digital infrastructure use cases. If you are interested, I would love to chat and explore collaboration opportunities.

Final Notes

It has been quite exciting to see the Hedera ecosystem grow over the last couple years. HCS is going to make an impact across the industry both in application but also infrastructure usage.

If you have questions about the Armada Platform or building on Hedera Hashgraph feel free to contact me at kent@armadachain.io.