Blockchain, most notably linked to Bitcoin, is very much a technology on the rise. Blockchain has recently made its way to Wall Street, with the largest financial institutions clamoring to partner with buzzing fintech startups to gain an understanding of the ins and outs of the technology. Blockchain is normally considered in light of industries like banking and digital currencies. However, other industries will have to factor Blockchain into their short term strategies as it has spawned a cottage “disruption” industry full of entrepreneurs who are searching for the next sector which can be up-ended by the technology. Many see the encumbering infrastructures of large scale industries, powered by decade-old software systems, as being very much ripe for disruption from Blockchain. For a technology to simultaneously be taken seriously by Wall Street, on the one hand, and be inspiring legions of forward-thinking innovators, on the other hand, may seem at odds to some. Those who have closely
followed Blockchain’s meteoric rise, however, have come to expect the unexpected.
These entrepreneurs see so much opportunity in Blockchain particularly because it offers some distinct advantages to existing technologies. Below we explore these advantages, particularly in the context of a business’ supply chain. We chose supply chains as many are a byzantine mess causing various issues in product creation and distribution. They are often inefficient, difficult to track and terribly insecure. Thus, supply chains seem to be a perfect match for Blockchain, as it promotes increased speed, transparency and efficacy. (https://techcrunch.com/2016/11/24/Blockchain-has-the-potential-to-revolutionize-the-supply-chain/).
- Increased Speed
- Blockchain allows businesses (and the customer) to view “end-to-end documentation of where and how materials are sourced, purchased, allocated, and used in an instant.” (http://www.forbes.com/sites/sap/2016/11/14/making-the-next-moves-with-Blockchain/#4f140e1e5738). This ability to have all transactional activity on a single ledger increases productivity and helps drive down costs.
- Increased Transparency
- Every piece of transactional information on Blockchain, and every sender and recipient of that information, is auditable and traceable by everyone who uses it. Thus, “all users know who owns every block, at any time.” (http://www.kpmgtechgrowth.co.uk/Blockchain-the-power-of-transparency/). This gives the final customer in a business’ supply chain comfort, as they are able to verify exactly from where the product came and if there were any issues during delivery.
- Increased Security
- Given recent high-profile hacks (like the DDoS attack on the Internet of Things (https://www.theguardian.com/technology/2016/oct/25/ddos-cyber-attack-dyn-internet-of-things)), the public’s concern for data security is at an all-time high. Blockchain relies on decentralized “nodes” using separate servers, which makes it all but impossible to hack the ledger. Blockchain also uses universal log-ins and digital signatures, which uses universal authentication and verified digital signatures to establish and solidify a user’s identity and gain a reputation over time. (https://blog.signatura.co/using-the-Blockchain-as-a-digital-signature-scheme-f584278ae826#.p8cjslmav). This could be of major use in a business’ supply chain, where verification and authentication are essential. Parties on both sides of the supply chain would be able to know exactly who they are dealing with and that the system they are using will not be compromised.
Above all, whether it is supply chains or something else, these advantages encompass the single most important thing Blockchain promotes: trust. When customers feel the services they are using are more efficient, more transparent and more secure, they begin to trust the underlying technology. However, as customers’ trust in Blockchain increases more and more, will the technology “eliminate[e] the need for a third-party middleman to spend time and money on verification”, among other things? (http://www.forbes.com/sites/sap/2016/11/14/making-the-next-moves-with-Blockchain/#4f140e1e5738). If so, we could be at the beginning of the Great Disruption. Given Blockchain is still in its start-up phase, it is difficult to tell at this point – but either way, it looks to be an eventful ride for Blockchain for the foreseeable future.