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Dec 28, 21  |  Ibrahim Imran

Will Blockchain Replace EDI? Everything You Need to Know

Will blockchain replace EDI? Do they compete or complement each other? This article aims to provide you with the answer you are in search of. 

Understanding the Need of Blockchain & EDI in Supply Chain

Multiplex supply networks must become more open and efficient in the future. In a supply chain, end-to-end visibility with a single version of the truth is a nirvana that every company strives for. Companies have transitioned from manual to paperless transactions as a result of the evolution of electronic data exchange (EDI). In any business's supply chain, EDI provides the cornerstone for digital transformation.

As technology improves, so do company demands for more efficiency, compliance, and profitability. Many of the problems afflicting today's supply chains can be accelerated and solved with blockchain. So, does this mean EDI will phase out? Is it necessary for you to transition towards blockchain? Well, let’s find out. 

>>> Blockchain App Builder: How to Make Your Own Blockchain Application

Significance of EDI with Blockchain

The importance of EDI and its standards cannot be overstated. It's essential for sending industry-standard data in a file format from one trading partner to the next via a standardized protocol. The value-added network (VAN) was phased out in favor of FTP and AS2. With blockchain entering the picture, we envision history repeating itself: industry-standard data (in EDI standards) will begin to be synched with the blockchain network. Your trading partners' information is extracted from local data sources and formatted according to these standards, then synced to the blockchain to create a single source of truth. 

Blockchain is a foundational block for multi-enterprise business networks and can provide a more clear, all-inclusive method in business-to-business (B2B) information processing. EDI is a standardized method of sharing data that blockchain can store as one or several blocks in its ledgers, process data with smart contracts, and distribute and exchange data through its consensual procedures.

But that’s not enough. We want to help you understand what blockchain technology is and how it interacts with EDI so you can spend less time researching, testing, and evaluating its worth to your business.

Blockchain & EDI Relationship 

Blockchain can also be used to prevent data theft or fraud. In other words, it can help you improve the efficiency of your global trading operations by establishing security and governance around data interchange, minimizing the overhead of officialdom and formalities.

Many industry players have already begun to harness the potential of blockchain to gather better data to boost their services, and blockchain empowers new business models. Logistics businesses using blockchain technology hope to transform the industry's nuances and rewrite its future.

Blockchain technology, when used correctly, can assure traceability throughout the whole supply chain. Blockchain technology offers a comprehensive solution for multi-enterprise transaction processing. As blockchain technology becomes more widely adopted, EDI will continue to serve as the fundamental channel for connecting to these networks.

>>> Blockchain Dapp Development: Everything You Need to Know 

How do Both Compliment Each Other? 

The security of a block on a blockchain is only as good as the software that interacts with it. In two ways, supply chain orchestration platforms assist their customers in connecting with partners:

By establishing a direct peer-to-peer link with a customer's preferred trade partner via a network or direct integration.

By bringing together specialized networks (multi-enterprise business networks). The onboarding of new trade partners with difficult collaboration potential among all other parties in the network, in order to provide intelligent automation and order/transaction orchestration within the network and its parties' systems.

Integration with a wide collection of partners, technologies, and data across many processes in the end-to-end supply chain is one of the major benefits of the transformation from specialized partner networks to multi-enterprise business network solutions (direct link).

In these particular supply chain procedures, customers can benefit from prebuilt connected parties, processes, and interfaces. A shared ledger and a single version of the truth are essential features of multi-party blockchain networks. Additionally, near real-time data combined with multi-party and community master data lowers mistakes and synchronizes updates for unrivalled business agility, performance, and security, reducing time to market for innovative solutions.

If a company is considering this, it would be beneficial if the underlying EDI platform connecting the multi-enterprise business network is not only accepted, but also primed for security, connectivity, and governance in order to maximize ROI and reduce the risk associated with adopting newer technologies.

Will Blockchain Replace EDI? No!

EDI will continue to perform the role of the plumber, feeding data from walled applications — from one company to another. EDI will also begin connecting those siloed applications to the network of networks — the blockchain — at the same time.

Blockchain will continue to work as a centralized database to serve as the trusted source across all parties in order to improve trust and create a single pane of glass across multi-enterprises.

We will see more firms use smarter contracts and a genuinely end-to-end strategy in the coming days. Simultaneously, EDI will continue to feed blockchain and isolated databases containing data with poor traceability. EDI will continue to solve its primary use case, data translation across applications and enterprises, because it is well-suited to undertake high-volume transactions on its own or with partners.

As a result, as we move toward an Industry 4.0 transition for businesses, blockchain and EDI will complement one another.


Will EDI be phased out in favor of blockchain? To have a better understanding of this subject, other questions must be answered, such as what are the benefits of blockchain versus EDI. Is it possible to combine EDI and blockchain? Which blockchain should be used, and is blockchain replacing EDI the way of the future? Now that we’ve answered these questions, you should make your decision smartly based on what you’ve learned today. 

Additionally, if you’re interested in connecting with the best blockchain technology companies, Distinguished.io has a list of them for you. Visit our platform and connect with your dream partner for your dream project with ease today! 


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