Blockchain is redefining the way we trade, exchange and conceptualise currency. It’s also having a revolutionary effect on supply chains and retailers who are leveraging the technology to drive growth and functionality.
It’s estimated that blockchain technology could be used by as many as 50% of all companies within the next three years. As the realities of blockchain become more tangible, businesses are able to pick and choose which form of blockchain technology will garner the best results for their business purposes. Aside from being a mechanism to freely exchange and hold currency, blockchain is becoming an increasingly attractive solution to manage any form of exchange, tracking process or agreement.
For traditionally challenging industries such as supply chains which rely on a high level of intermediaries, blockchain may pose as a solution to streamline the process. It seems already that blockchain is being rolled out at lightning speed in these type of sectors. Here are some industries where blockchain technology is having a transformative effect:
Supply chains have long invested in digital infrastructure to track shipping on computerized systems. This investment, however, has not seen a rise in product visibility and insight into the overall product journey. Blockchain solutions work to eradicate the need for intermediaries in the supply chain. It achieves this by synchronising all data and transactions across the network. This cross-checking makes the network secure, reliable and unable to be exploited by third-parties. Payment delays known as ‘analogue gaps’ are eliminated on a blockchain system through digital contracts that integrate delivery and payment.
Oracle reports that more than 100 companies are using its blockchain solution for supply chains. In this environment, blockchain can be used to self-execute supply contracts and systematise cold chain organisation. The offering enables customers to track products more effectively increasing transparency. Blockchain systems have accelerated delivery times and subsequently customer satisfaction.
Singapore-based blockchain start-up Perlin Net Group has partnered with the ICC (International Chamber of Commerce) which represents 45 million businesses and 130 countries. ICC is interested in using blockchain technology to move value without banks and facilitate the free flow of goods across international borders. This would allow the private sector to operate more sustainably and with a greater insight into the product journey. The ICC Blockchain/DLT Alliance is exploring Perlin’s platform to diminish the presence of obscure supply chains and simplify cross-border trade finance. As such Perlin will join the ICC as an official technology partner to further explore and implement blockchain solutions.
The ICC and Perlin’s collaboration with fabric corporation Asia Pacific Rayon, ‘Follow Our Fibre’ is a project that has produced interesting insights into the supply chain industry. The venture involves the APR logging data in the blockchain at every level of its supply chain. This begins with the trees that are harvested and follows it all the way to the chemical treatments that turn them into silk. It concludes at the spools that are later sold to clothing producers and gives companies a real glimpse into the industrial process.
This move is representative of the global shift in the textile industry for greater transparency and traceability in the supply chain. By leveraging blockchain technology APR is able to drive both. Transparency is a huge concern for consumers and manufacturers alike who require greater insight into the working conditions of the factories they outsource to.
Empowered with this information, brands and companies are able to have a better idea of the social and environmental impact their manufacturing is having. Similarly, consumers are more and more inclined to support brands that disclose their supply chain information and make purchase decisions as such. Blockchain technology will not only work to illuminate the product journey, but it will empower brands to make ethical changes.
A similar project is underway in Africa which traces the origins of cobalt which has a long history of being mined by unethical supply chain proponents. In the case that enough supply chains were unified on the Perlin blockchain system, companies could log digital tokens on the platform. As this technology continues to emerge, the need for centralised systems of processing will diminish.
Branded currency is retail mechanisms like coupons, gift cards and loyalty points that give customers incremental spending power. Branded currency is a marketing instrument that endeavours to influence a customer’s purchase behaviour and is at the now at the forefront of blockchain innovation. The digitalisation of branded currency has resulted in a convergence of buying power and blockchain solutions presents an opportunity that allows consumers to use their branded currency interchangeably or collectively.
Branded currency is a projected $750B industry which is now hurtling towards a cashless space powered by blockchain and AI. The rollout of blockchain technology in the branded currency industry would function to safeguard and decentralise the data that is collected and stored. This data would thus be fraud-proof and encourage a system that would resolve the current inefficiencies afflicting the sector. The current model has significant shortcomings when it comes to exchanging points or lost gift cards. Blockchain implementation allows us to envision the cross-border exchange of gift cards and loyalty points through its ability to bring together various data points across a transaction.
The intersection of rewards and blockchain solutions is backed by SRAX, a data management firm that is using an app called BIGtoken to foster relationships with consumers. BIGtoken allows customers to earn rewards when they opt into sharing their data and their data is purchased. They give consumers the power over what kind of data is shared and who can purchase it. Blockchain technology allows them to track their data journey and be the custodian who decides how their data is used.
This notion of ‘paying’ for a consumers data is completely revolutionary in our data-sharing marketplace where companies have become accustomed to taking it for free (or paying intermediaries for it). In addition to consumers regaining power over their data, cryptocurrencies are set to be integrated on branded currency platforms.
The whole premise of blockchain technology lies in its ability to disrupt the way we do things. Financial systems and institutions are automatically associated with blockchain implementation due to the popularisation of cryptocurrencies like Bitcoin. Many other industries, however, are set to transform under Blockchain’s incorruptible ledger.
Finance & Banking
Blockchain at its core is a technological institution that is set to fundamentally change the way we transact, exchange and think about value. The finance sector is one ripe for disruption, with banking institutions at the centre of this change. Blockchain technology is revolutionary in its ability to allow us to transact digitally without the need for third-parties. This is already having a transformative effect on the finance industry.
Banks, governments, regulators all help to manage our transactions. These intermediaries perform all the logistical tasks from authentication and identification of people to record-keeping. Intermediaries, therefore, exist to establish confidence in our economy.
In 2008, the world was brought to a standstill during the Global Financial Crisis. This was also the impetus for blockchain development as an unknown group of cryptographers known under the pseudonym, Satoshi Nakamoto created a decentralised, peer-to-peer, digital currency based on online public ledgers. Cryptocurrency thus emerged out of the wreckage of the GFC. Instead of instilling confidence in the economy, intermediaries had begun to fuel discontent as they continued to profit off our transactions.
Blockchain technology can transform the financial sector with greater transactional efficiency. By eliminating the need for intermediaries, blockchain technology would also lower the costs of transacting, particularly in cases of cross-border exchange. Blockchain is a way of interacting and transacting that actually reflects the modern reality of our technologically advanced world.
The nature of blockchain technology means that information is owned by a network or community as opposed to one central authority. This means that it’s decentralised. All the data on a blockchain network is cryptographically stored making it immutable and completely transparent.
Blockchain technology has the ability to change the finance industry in a few important ways:
As the global marketplace continues to evolve, as does the need for an interconnected banking system. Cross-border transactions remain relatively untouched by the digital revolution. While transferring funds from one account to another is available is possible with the click of a finger, moving funds overseas can take up to a week to finalise. This system remains insufficient in meeting the growing demand for global transactions and exchanges.
Blockchain technology allows banks to create a direct link between one another, thus avoiding correspondent banking. Transactions would then be able to happen freely between two parties on a peer-to-peer system, instantly.
Digital Assets As A ClassBlockchain technology has created the concept of digital property. Digital code that is stored on a blockchain system is unable to be copied or duplicated. This has made the idea of digital property possible.
Accounting and Auditing
Accounting and auditing practices will be impacted significantly by blockchain technology as these databases are built from their own transactional history. This makes them completely transparent and easily audited.
Smart contracts are automated and verifiable agreements, transactions and exchanges. These self-executing contracts are able to be enforced once the terms of the agreement are met. Business collaborations, asset trades or exchanges can all be governed by smart contracts.