This is the first part of my blog series on SAP HANA blockchain.

Make sure to check

out the others as well!

Part 1: SAP HANA Blockchain: An Introduction

Part 2: SAP HANA Blockchain: Technical Overview

Part 3: SAP HANA Blockchain: Setup SAP HANA, express edition for HANA blockchain

There is likely no other topic in the IT Industry that generates as much

controversy these days as blockchain. Some believe blockchain to be the biggest
revolution since the dawn of the internet. Others see it as an overhyped waste of
resources with no practical applications. Certain is: Everybody seems to be talking
about it.

In an ecosystem dominated by startups, one huge challenge that remains is how

blockchain can be integrated into enterprise applications. Last week at SAPPHIRE in
Orlando, SAP officially launched SAP Cloud Platform blockchain. SCP blockchain
enables customers and partners to build and extend applications with blockchain
technology. As such, it is the basis for adding distributed ledger technology to
SAP solutions. Unique, however, is the integration of SCP blockchain service with
SAP Leonardo, allowing the combination of blockchain with other straight-edge
technologies like the Internet of Things.

A great addition to this is SAP HANA Blockchain, which connects any SAP HANA
database to the most popular enterprise blockchain platforms. This provides very
interesting capabilities that were previously unheard of in the blockchain
ecosystem. This blog is the first in a series of blogs on SAP HANA Blockchain. It
introduces the technical concept and the different components, as well as the
upcoming beta program.

I highly recommend to also check out Daniel Schneiss � Global Head of HANA
Development � blog on how SAP HANA Blockchain brings business and blockchain data
together.

What is blockchain?
If this blog is not the first thing you�re reading about blockchain, you might have
heard this phrase before: �Blockchain is not Bitcoin�. If you haven�t heard it
before, well, you have now.

Blockchain is a technological concept, while Bitcoin is an implementation of that

concept. A distributed ledger, formed across a peer-to-peer network of
independently controlled nodes. Every participant on this network has a copy of and
instant access to all data and � at least in public blockchains � is equal to all
other participants. There is no central authority that approves or declines
transactions, but consensus about the �one truth� is achieved algorithmically. Once
a transaction has been stored on the blockchain and consensus is achieved, it is
secured cryptographically, which makes it inherently impossible to tamper with (or
at least very, very, very hard).

These characteristics open a wide range of applications and there have been
numerous publications. I won�t reiterate on that topic, but rather recommend a
couple of resources to get an overview.

Enterprise Blockchains and the Data Integration Challenge

The blockchain voyage � from the Bitcoin network to Blockchain-as-a-Service
Business Opportunities and Caveats of Blockchains � Part 1
Business Opportunities and Caveats of Blockchains � Part 2
From a technical point of view, a blockchain is basically a linked list of blocks,
with each block containing a number of transactions. Each block contains a hash of
the previous block � a cryptographic fingerprint that uniquely identifies a block
and all its content. If only one bit of the block changes � for example by
tampering with a transaction � the hash value changes as well, which effectively
breaks the chain and invalidates all subsequent blocks and transactions. This makes
blockchain almost impossible to tamper with. In case of Bitcoin, for example,
establishing an alternative transaction history requires control of at least 50% of
the computational resources of the network. With a power consumption rivaling
countries like Ireland, this can be considered practically impossible.

SAP HANA � yet another Blockchain platform?

Neither SAP Cloud Platform Blockchain nor SAP HANA are a blockchain platform like
Bitcoin, Ethereum or Hyperledger fabric. Blockchain is a concept based on
collaboration and interoperability. SAPs strategy is not to establish yet another
platform and create an SAP-centric blockchain ecosystem, but to integrate into
existing enterprise blockchain platforms. SCP Blockchain currently supports
Hyperledger fabric (SAP being a premier member of the Linux Foundations Hyperledger
project) and MultiChain. With its modular approach, other blockchain platforms can
be added easily in the future.

SCP Blockchain connects to any supported blockchain network via a cloud service on
SAP Cloud Platform. SAP HANA Blockchain establishes a link between this cloud
service and SAP HANA, which results in a representation of on-chain data in SAP
HANA as a set of regular column store tables. Technically, this requires two
components.

SAP HANA Blockchain service � A cloud service that is deployed with SAP Leonardo
blockchain.
SAP HANA Blockchain adapter � An SDI connector that is deployed with your SAP HANA
instance, available via the SAP ONE support launchpad (formerly Service
Marketplace).
The SAP HANA blockchain adapter subscribes to the HANA blockchain service in the
cloud, which in turn communicates with the SAP Blockchain service. The interplay of
the different components ensures that transactions submitted to the blockchain are
replicated into SAP HANA. This replication works bi-directionally, meaning that
transactions inserted in SAP HANA also find their way back to the blockchain, where
they can be consumed by other applications.

For a great visual introduction on how SAP HANA blockchain works, I recommend this
Lab Preview.

>> Watch Lab Preview

Easily combine on- and off-chain data

Some of the characteristics of blockchain make it necessary to carefully evaluate
what data can and should be stored on the blockchain. Some of the reasons are legal
or regulatory. Data protection is a great example, especially in the context of the
EUs General Data Protection Regulation (GDPR). Others are performance-related.
Storing data on a blockchain is always more expensive than storing it on a central
data store. It must be replicated to all participants, verified, hashes must be
generated, etc. It�s usually much more economical if you keep the data footprint on
the blockchain low.

As a result, a typical business application will most likely store most of the data
�off-chain� in a conventional data store, while only necessary data is stored �on-
chain� on the actual blockchain. Now, how do we get on- and off-chain data together
again?

In a domain dominated by startups, the integration of on-chain data with an

enterprise-grade database platform like SAP HANA is unique. With all on-chain data
available in SAP HANAs column store through the default SQL interface, combining
this data with off-chain data becomes trivial. On-chain data is accessible by all
of SAP HANAs advanced analytic engines. This allows simple SQL queries to quickly
access a specific excerpt of data, as well as complex scenarios combining local and
remote data sources, leveraging SAP HANAs graph, spatial and text search engines
and even HANAs machine learning capabilities.