Blockchains: Here’s the Proof of the Pudding…
Blockchain, that sneaky little thing. It tiptoed into our world through a mysterious cast, and today, it’s omnipresent. From conferences and boardrooms to academia, there is constant noise about this technology and its usefulness. But barring the hottest proof of its existence that is Bitcoin, the question remains: are companies actually using this technology, or is it vaporware?
Let’s find out…
Supply Chain and Logistics
The $16 trillion supply chain and logistics industry spans a complex ecosystem of corporations, intermediaries, and officials. When you find out that a single shipment of avocados from Mombasa to Rotterdam involves ‘30+ actors, 100+ people, and 200 information exchanges’, you cannot help but conclude that here is an industry that is in dire need of transformation.
TradeLens, a joint venture between Maersk and IBM, aims to use blockchain to eliminate various barriers within the international supply chain such as time-consuming paper processes, duplication of information, errors in information exchange, and long-winded clearance processes. TradeLens, as of writing, is currently in beta and gradually approaching production scale processing a whopping 150 million events per day!
Blockchains in the supply chain and logistics industry could be such a game changer that industry executives from all over the world have formed the Blockchain in Transport Alliance (BiTA). BiTA is carrying on the important task of blockchain standardization and education for the freight industry, and Chainstack is honored to be part of this forum of progressive supply chain professionals.
Founded by EY and Guardtime, Insurwave is an enterprise consortium that brings together heavyweights such as Maersk, Microsoft, Willis Towers Watson, and XL Caitlin. The aim is to transform risk management in a notoriously siloed industry such as marine hull insurance by providing a single source of truth to all players in the value chain.
On the consumer side, there’s Fizzy, a smart-contract powered app that’s making a small dent in the multi-trillion world of insurance. It covers the traveler for flight delay and indemnifies her almost instantly on such an event occurring. Fizzy takes the concept of parametric insurance to a whole new level of transparency allowing a third party (code in this case) to decide whether or not the insured party must be paid.
Smart Cities and IoT
Waste management is an integral part of any city planning and costs millions of dollars. From collecting and managing to removing waste, waste management is a highly coordinated exercise that should be anything but wasteful. So how about combining two powerful technologies to address this growing problem? That’s exactly what Taipei City Government plans to do.
No doubt still a PoC, it holds great promise for every city that aspires to be livable in the first place and, beyond that, smart. The solution comprises waste bins powered by sensors to record fill-levels of waste bins and recording data to IOTA (a tangle-based distributed ledger technology). This provides real-time visibility to all participants in the waste management ecosystem and facilitates automatic micropayments to service providers through smart contracts.
Parts tracking and authenticity are major concerns across the manufacturing supply chain and cost companies billions of dollars in fraud, leakage, and information redundancy. Fortunately, there is a bunch of bold startups that is rising to the challenge.
Chronicled, for instance, is combining AI, IoT, and Blockchain to address manufacturing supply chain inefficiencies. PartsPedigree is trying to tackle similar problems for aerospace and automotive. Tracking and authenticity are also major concerns in the pharma supply chain, and BlockPharma wants to make a difference by combining machine learning with blockchain.
MonetaGo, a New York-headquartered blockchain applications company, successfully implemented a blockchain platform in India to tackle fraud around accounts receivables financing. The accounts receivables financing industry already loans around USD 200 bn to small and medium-sized businesses, and there is a potential of another USD 188 bn if the issue of fraud is tackled. The blockchain provides a common platform with no single financial institution in control and provides participants, who are also competitors, transaction privacy.
What happens when you are an investment advisory firm specializing in creating financial products, and the rug is pulled from under your feet? That’s what happened when Solidium Partners, a firm in catastrophe bonds, lost access to an intermediary clearinghouse. Solidium met this challenge by launching its $15 million catastrophe bond on a blockchain allowing participants to directly transact dollars and bond units. Since then, the firm has gone further and conducted an Insurance Linked Security trade on its blockchain without the use of a bank or broker-dealer and any fees.
Admittedly, this is a whirlwind tour through the landscape of blockchain adoption. It does not do justice to the scores of cool projects being tested by corporations that are pushing the boundaries of their own business models. Nor can it document the ones that are silently active and making an impact. For what it’s worth, it’s my way of communicating that here is a piece of technology that’s compelling us to think in novel ways, and it’s slowly succeeding. Not a bad performance for something that sneaked into our world 10 years ago and is now changing corporate and individual mindsets globally.
“Indeed, private blockchains should be considered for any situation in which two or more organizations need a shared view of reality, and that view does not originate from a single source. In these cases, blockchains offer an alternative to the need for a trusted intermediary, leading to significant savings in hassle and cost”. Dr. Gideon Greenspan