Blockchain in Today’s Industries
Cryptocurrency is built on blockchain technology and much of its success is accredited to this revolutionary breakthrough. When you hear “blockchain” or “blockchain technology,” some buzzwords that come to mind are cryptocurrency, finance, or decentralized processes. However, blockchain technology applies to so much more than simply finance or crypto-related fields. In today’s society, blockchain is expanding into the corporate sector and revolutionizing multiple industries outside of just finance. Here are a few industries within the corporate sector that are utilizing blockchain technology.
Automotive & Transportation
The introduction of blockchain technology has largely influenced the transportation industry, making companies more profitable than ever. For starters, any business which employs transportation services can now easily organize who and where their shipments are going to. The decentralized ledger allows business owners to quickly see the exact details of each and every transaction, eliminating mountains of paperwork and middlemen which prolongs the process even more. Deliveries have the potential to be much quicker given the integration of smart contracts which will reduce time spent at checkpoints or clearance requests. With the increased demand for “same-day shipping” or “express shipping,” the possibilities are endless considering how fast blockchain is improving the system.
Shipping disputes, unsafe roads, and damaged products are all issues that can be erased with blockchain technology, relying on the — for the most part automatic — input of data that can verify and authenticate each transaction. As such, new blockchain e-wallets are being developed for the automotive industry which will allow people to securely make peer to peer ridesharing transactions as well as automatically pay for tolls and other fees.
Several shipping giants have already taken the first steps towards adopting blockchain technology. In fact, UPS is one of the earliest supporters of blockchain technology in the shipping industry, fist gaining exposure in late 2017 by joining the Blockchain in Trucking Alliance (BiTA). Specifically, UPS is exploring blockchain applications within its own supply chain to increase efficiency in all transactions. “The technology has the potential to increase transparency and efficiency among shippers,” says UPS director of enterprise architecture and innovation Linda Weakland. Not long after, FedEx also joined BiTA in an effort to integrate blockchain into its daily operations as well. Not to mention, the world’s largest shipping company Maersk finished up its first test of a new blockchain-based system to manage cargo. With strong support from multiple industry leaders, blockchain-based technology is quickly emerging into this space and could soon be an integral component to its future success. Early adoption of blockchain initiatives by mature companies like UPS and FedEx indicates a promising future for the innovative technology in this industry.
Supply Chain
Increased transparency coupled with permanent decentralized transactions will ultimately transform the way supply chains are managed in all facets of the system. Again, we observe the potential of blockchain to rapidly increase efficiency and security, resulting in less human error and time that is being wasted. Increasing decentralization and empowering better capacity to be provided by different service providers will result in lower costs of delivery, providing beneficial outputs for both the consumer and provider. However, the risk that arises is that it alienates existing asset owners who work against the market trends of decentralized models and seek to centralize payment for the benefit of receiving a higher return.
One of the key overarching benefits that arise from the integration of blockchain technology within supply chain management is the reduction of waste emissions and increased environmental safety. Now, every single step of the supply chain can be monitored and analyzed, allowing experts to properly assess what kind of environmental or health impact their products present. Additionally, this creates a higher standard of efficiency which will help accelerate the rate at which we innovate our own technology as businesses seek to push the envelope for how efficient they can be.
So who are the leaders of utilizing blockchain technology within internal supply chains? Well, similar to those in the transportation industry, companies in the food industry rapidly dove into the blockchain space and created a Walmart-led “Food Trust” consisting of ten industry giants including notable chains like Nestle and Dole. Together, these companies will work to consolidate and share data regarding produce transactions in order to prevent health crises. For reference, blockchain technology lets employees trace any produce to its source in just 2.2 seconds — much faster than the full week that it usually takes. When the facts identify drastic improvements in efficiency of this scale, it’s hard to reject the claim that blockchain can be the future of all supply chain systems.
Shipping
Any business that deals with transactions or purchases is susceptible to disruption from blockchain technology. Recipient verification processes are usually what elongates the entire shipping process the most, but thanks to smart contracts and the trustless ledgers, all of this can quickly change. Shipments can be traced from the second they are shipped to the moment the recipient signs off on receiving it, and utilizing the public ledger to have a recorded history of all ownership and its details will make this process much more efficient. With increased efficiency comes decreased fees and transactional payments, which poses a threat to large marketplaces which attach a small fee to third-party sellers.
Let’s take Amazon as an example. Bezos has legitimized Amazon as one of the most — if not the most — dominant marketplaces for e-commerce. Unfortunately, this comes at the expense of third-party sellers who run the risk of having Amazon essentially copy their product to cut them out of the loop completely, potentially making their business obsolete. As such, decentralized marketplaces can give the shipping and handling fees to the producer, allowing him or her to adjust prices directly. Although there are several risks that coincide with the emergence of decentralized marketplaces, it’s clear that monopolistic companies like Amazon are already facing the disruption of blockchain technology in the shipping sector.
Blockchain will ultimately democratize capital, eliminate middlemen, and rehumanize commerce as the applications of its technology continues to grow in markets outside of finance. Over the next five to ten years, expect many more industries to be disrupted by this innovative technology as it quickly continues to emerge as one of the most revolutionary systems we’ve ever witnessed since the internet.
What are some interesting blockchain applications that you have heard about? Let us know in the comments below!
