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The Future of Asset Identification with Blockchain Technology

Discover how Blockchain can Enhance Security and Efficiency for Asset Identification.

ælf
aelf
9 min readDec 4, 2023

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Asset identification is the process of uniquely identifying and tracking assets throughout their lifecycle. It is a critical function for businesses and governments, as it helps ensure asset security, compliance, and efficient operations.

The future of asset identification is expected to be shaped by several emerging technologies (McKinsey & Company, 2022), including:

  • Internet of Things (IoT): IoT tags and sensors can be attached to assets to track their location and condition in real-time. This data can be fed into an asset management system to provide businesses with a complete picture of their asset inventory to improve asset tracking and maintenance.
  • Artificial intelligence (AI) and machine learning (ML): AI and ML can analyse asset data to identify patterns and trends. This information can then predict asset failures, improve asset utilisation and set automated actions such as preventive maintenance to avoid costly downtime.
  • Blockchain: Blockchain can create a secure and tamper-proof record of asset ownership and history. This could help to reduce asset theft and fraud, and also be used to facilitate asset transactions and transfers.

This piece will elaborate on the future of asset identification through blockchain.

Blockchain Use Case

Blockchain is a distributed ledger technology that allows for secure and transparent transactions. It is well-suited for asset identification because it can provide an immutable record of asset ownership and provenance.

We can’t talk about blockchain without mentioning cryptocurrencies. Cryptocurrencies, such as Bitcoin and Ethereum, are one of the most well-known use cases of blockchain technology. However, it’s important to note that blockchain is a much broader technology with many other potential use cases.

Cryptocurrencies are just one way to use blockchain technology. Other potential use cases include:

  • Walmart: Walmart uses blockchain to track food movement through its supply chain. This helps ensure food is safe and sourced from sustainable suppliers throughout the value chain. (Walmart, 2020)
  • De Beers: De Beers uses blockchain to track the movement of diamonds from the mine to the consumer. This helps ensure that their diamonds are differentiated from others on the market and are not counterfeited. (De Beers, 2022)
  • Agora: Sierra Leone used Agora’s blockchain solution for their 2018 presidential elections, which took place on March 7th. Agora’s blockchain-based voting system uses multiple blockchains to ensure that voter identity remains anonymous while keeping results easily audited, thereby improving the security and transparency of elections. (Techcrunch, 2018)
Figure 1: Blockchain Value Framework Cheat Sheet (World Economic Forum 2019)

Blockchain is not all about Cryptocurrencies

Cryptocurrencies have been the most well-known use case of blockchain. (World Economic Forum, 2019) However, it has also been often associated with bad press, including scams, hacks, and environmental concerns. This has affected the public perception of blockchain technology, making it challenging for businesses and organisations to adopt blockchain, even if they see the potential benefits. Improving public perception of blockchain is a long-term challenge, but it is essential for the widespread adoption of this technology.

The best way to address this challenge is to educate the public about blockchain technology and help people understand how it works, its benefits, and its risks. We must also be transparent about our challenges and the steps we take to address them.

Risks and Challenges of Blockchain

Blockchain has the potential to revolutionise this era of web users. However, it is still a new and evolving technology, and there are some risks and challenges associated with its use. (Forbes, 2023)

  • Security and Scalability

One of the biggest risks is security. Blockchain networks are not immune to hacking and other cyberattacks. In recent years, some high-profile blockchain hacks have resulted in the theft of millions of dollars worth of cryptocurrency. Blockchain networks can also be slow and inefficient in processing transactions, especially as the number of users and transactions increases. This is known as the scalability problem.

  • Talents and Cost

Blockchain technology requires implementors to learn new complex theories to understand and safely implement the technology. For example, smart contracts — self-executing contracts that run on a blockchain, can be complex to develop and difficult to debug. If a smart contract contains a bug, bad agents could exploit it to execute attacks such as stealing money or other assets. This can make it prohibitive and expensive for businesses to develop and deploy blockchain-based applications.

  • Regulations

There are also regulatory challenges associated with blockchain. While blockchain is a global technology, regulations vary from country to country. Also, blockchain’s rapidly evolving nature can bring uncertainty as incumbents and prospects are unsure about the future of blockchain regulations. This can pose concerns to businesses as they have to consistently stay up to date with regulations to ensure adequate compliance with all applicable regulations.

Mitigate the Risks and Challenges of Blockchain

There are a number of things that businesses and individuals can do to mitigate the risks and challenges of blockchain:

  • Security and Scalability

Many blockchain projects are exploring ways to address the scalability problem. For example, some projects are developing new consensus algorithms to process transactions more efficiently. Others are developing layer-two solutions that can scale blockchain networks. When choosing a blockchain platform, it is vital to consider its security features and track record. For instance, aelf uses AEDPoS, where token holders vote on trusted block producers to validate transactions and create new blocks on the blockchain.

aelf

aelf, a high-performance layer 1 blockchain, can help businesses and organisations with the future of asset identification. Designed to be scalable, secure, and flexible, it is powered by a unique cross-chain architecture that allows it to process transactions quickly and efficiently. aelf also uses various security features to protect assets from theft and fraud.

Nevertheless, aelf’s open-source architecture fosters collaborative innovation with businesses and organisations. By investing in research and development, solutions can be co-created to enhance the security, scalability, and usability of aelf blockchain technology.

  • Talents and Cost

The complexity of blockchain technology is a challenge, but it is also an opportunity. Businesses that successfully develop and deploy blockchain-based applications might be better positioned to compete in the future. Acting as an enabler, aelf has committed to improving developer experience through its “aelfinity Developer Workshop”, where participants learn how to integrate aelf’s SDK and Portkey’s SDK into their project.

This can also be a test bed for developers and businesses to explore the aelf’s layer 1 solution before committing. There is also an option to use a managed blockchain service, which can help to reduce the complexity of using blockchain.

Alchemy

Alchemy is a blockchain-as-a-service (BaaS) platform that simplifies the development and deployment of blockchain applications. The platform includes support for prominent blockchain frameworks like Ethereum and Hyperledger Fabric and various tools and services to aid in building blockchain applications. (Alchemy, 2023)

Chainstack

Chainstack is a managed service blockchain platform that streamlines the development and deployment of blockchain applications in just a few clicks. The platform is intended to make developing and administering blockchain networks more accessible, and it supports a variety of prominent blockchain frameworks such as Hyperledger Fabric, Ethereum, and Quorum. (Chainstack, 2023)

Regulations

Regulatory uncertainty is a challenge, but it is also an opportunity for businesses to shape the future of blockchain regulation. Organisations could work closely with regulators to encourage a balanced approach to regulating blockchain and develop clear and consistent regulations that support innovation. For instance, the founder of aelf, Ma Haobo, led the creation of IEEE 3207–2022, an international standard for blockchain-based digital asset identification. (aelf, 2022)

IEEE 3207–2022

IEEE 3207–2022 is the international standard for blockchain-based digital asset identification. It was published by the Institute of Electrical and Electronics Engineers (IEEE) in March 2022.

The standard defines a set of data fields, types, and formats that can be used to identify digital assets on a blockchain. It also guides the use of blockchain technology to create and manage digital asset identities.

The standard is designed to help businesses and organisations improve the efficiency and accuracy of their digital asset identification processes. It can also help to reduce the risk of fraud and theft.

IEEE 3207–2022 is still a relatively new standard, but it is already gaining traction in the industry. Several companies are developing blockchain-based asset management solutions compliant with the standard.

Here are some examples of how IEEE 3207–2022 can be used in different industries:

  • Manufacturing: The standard can track the movement of parts and materials through the manufacturing process, improving production efficiency and reducing costs.
  • Supply chain management: The standard can track the movement of goods through the supply chain, enhancing transparency and reducing the risk of fraud.
  • Financial services: The standard can track ownership and transfer of digital assets, such as securities and cryptocurrencies, reducing the risk of fraud and improving market efficiency.

Finally, the energy consumption of blockchain networks is a concern, but it is also a challenge that is being addressed. Some blockchain projects are developing more energy-efficient consensus algorithms, while others are exploring the use of renewable energy to power blockchain networks. (Inside Ecology, 2023)

Conclusion

Despite the challenges, blockchain can significantly improve how assets are identified and managed. In the future, we can expect blockchain to track a wide range of assets, from physical goods to digital assets.

While there are still some risks and challenges associated with the use of blockchain, these are being addressed by the blockchain community. Businesses and organisations can start exploring using blockchain to improve asset identification and management.

Sources:

About aelf

aelf, a high-performance Layer 1 featuring multi-sidechain technology for unlimited scalability. aelf blockchain is designed to power the development of Web3 and support its continuous advancement into the future. Founded in 2017 with its global hub based in Singapore, aelf is one of the pioneers of the mainchain-sidechain architecture concept. Incorporating key foundational components, including AEDPoS, aelf’s variation of a Delegated Proof-of-Stake (DPoS) consensus protocol; parallel processing; peer-to-peer (P2P) network communication; cross-chain bridges, and a dynamic side chain indexing mechanism, aelf delivers a highly efficient, safe, and modular ecosystem with high throughput, scalability, and interoperability.

aelf facilitates the building, integrating, and deploying of smart contracts and decentralised apps (dApps) on its blockchain with its native C# software development kit (SDK) and SDKs in other languages, including Java, JS, Python, and Go. aelf’s ecosystem also houses a range of dApps to support a flourishing blockchain network. aelf is committed to fostering innovation within its ecosystem and remains dedicated to driving the development of Web3 and the adoption of blockchain technology.

Stay connected and engage with the aelf community on Telegram and Discord:

Telegram: https://t.me/aelfblockchain

Discord: https://discord.gg/bgysa9xjvD

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ælf
aelf

Written by ælf

3.2K Followers

ælf, the next breakthrough in Blockchain.

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