IoTBlock (iotblock.io)
Jun 2 · 9 min read

Data on the internet is anonymous, blind, and exposed. Data silos, data and privacy breaches, data theft/leaks, insurance fraud, and untrustable hardware are all negative effects from the lack of governance and oversight on machine and human identity policies.

A business network today is complex, siloed, unsynchronized, inefficient, vulnerable, and expensive to secure.

The world needs a new universal protocol to ensure trusted IoT governance that knows if data from these IoT endpoints can be trusted, which is why IoTBlock was founded in early 2018 with a mission to develop a solution “to enable the open and secure exchange of IoT data” by “building blocks for trustless IoT.”

After over a year of market research, development, validation from customers in the supply chain vertical, and input from strategic enterprise partners with domain expertise in supply chain since 2004, we concluded that IoT data access must be more standardized and easily accessible by disparate applications and organizations before trustless IoT governance can be addressed.

Obstacles for Supply Chain Data Standardization

So what are the major obstacles that are preventing IoT and supply chain data to be more standardized?

Unpredictable, dynamic supply chain networks

Supply chain networks are organisms that grow and shrink daily with different organizations. This means that vendors change all the time, their processes change all the time, and it usually is because of a personal reason versus a business reason.

A few common example scenarios:

  • “His brother knows my brother and therefore we’re doing business with his company now.”
  • “These guys are half the price of everybody else, we move over to them even though it’s a pain to deal with them.”
  • “We know we are getting the best price from this company and don’t care if they are following the rules along the way in the supply chain. Our guess is they are probably not, but as long as we get our goods at the price we are getting, we are fine with not having a system that would bring transparency to this.”

The complexities, risks, and constraints for organizations to opt-in to a specific standard or system can be long, so that is why it is important to appropriately incentivize all the organizations.

Siloed, heterogeneous, and non-standardized data

Different data collection, processing, and storage methodologies used by disparate organizations often result in data conflicts, poor data quality, missing data, and inefficient use of resources. It is a competitive differentiator to have a clean and efficient supply chain process. This is why big companies like Apple and Walmart dictate a specific, proprietary supply chain process. Most companies will try to hold to certain standards, but that is usually only when they are interfacing with big companies like Walmart. When they are interfacing with their own supply chain, they may be interfacing with an array of different systems such as Oracle, Net Suite, SAP, or a whole litany of other ERP solutions. In many cases, there is never one standard or cohesive solution for supply chain data.

IP security and competition

Supply chain management methods and data are not willingly disclosed due to IP security versus the competition.

Fragmented regulatory compliance

Data that traverses geographic boundaries between cities, states, counties, and countries sometimes have to have specific policies that are built in with them to remain compliant.

Why Supply Chain Blockchains Fail

Many blockchain-enabled supply chain solutions we have seen so far have failed because of the following reasons:

Frequent changes in business workflows and processes

Blockchain systems that record supply chain data workflows and processes on distributed ledgers such as Hyperledger or Enterprise Ethereum get destroyed or become insanely complex once the workflows or processes are updated.

Bad or unclean data

Bad or unclean data going onto the blockchain where it becomes immutable is also problematic, let alone figuring out the mutually agreed upon protocols to implement corrections and fixes to bad data.

Unable to fetch real-world data

Lastly, blockchains and smart contracts cannot directly fetch real-world data data and relying on a trusted third party betrays the security of a trustless model. A decentralized oracle network as a layer 2 solution to securely enable connectivity betweeen trusted data sources and the blockchain is required (more on this later on).

Blockchains or smart contracts cannot fetch data API’s on their own.

Ultimately, these become obstacles for a business network to work with each others’ data, let alone, band together as a consortium, agree on a single standard, secure way to collect data, process data, and then record this data on a shared database on a permissioned blockchain. Achieving this goal in a global supply chain network would be tantamount to asking every organization to learn how to speak perfect English and abide by and govern each other using a strict set of grammar rules, and then changing these rules every so often, then expecting everyone in the network to follow along.

Democratic, Data First Approach

Having high-quality data is a mandatory prerequisite for governance. Being able to provide quality information that is relevant to the direct business model such as loaning against accounts receivable or accounts payable in supply chain finance, is valuable.

ERP companies are currently using workarounds like predictive analytics to figure out missing or bad data. Most of the time, these companies are a black box for IP protection reasons so it is impossible to get the blueprint of the processes performed in the software.

We believe direct access to high-quality supply chain data should be open to everyone, not just from large tech companies who’s software may be black boxes for data you depend on. This promotes maximum innovation and the markets will dictate what what applications are useful in all industry segments for companies and end-users or all shapes and sizes.

This can be achieved if IoT and supply chain data from disparate organizations are integrated, cleaned and enriched, standardized, and then delivered to a new generation of digital applications via a universal API which any developer or organization can use to simplify back-end development and quickly launch on-premise, cloud, or blockchain applications.

IoTBlock is this new universal supply chain API.

Once high-quality data is obtained, blockchain and smart contracts can then be used to share or monetized the data to others with confidence.

A trustless supply chain business network of tomorrow will use blockchain and smart contracts.
IoTBlock’s API and Blockchain Bridge allows companies to securely share and monetize trusted IoT and supply chain data to others with confidence.

Contributing to a future where trustless IoT is possible, the new, refined vision of IoTBlock is:

To democratize access to high quality IoT and supply chain data and services and to promote innovation and sustainable global commerce through technology.

Use Case: Counterfeit and Fraud Prevention

Let’s look a common scenario in the supply chain:

  1. A customer complains to an online retailer that their purchased product is counterfeit.
  2. The retailer does not know if that complaint is true or fraudulent. Sometimes, the customer may even have swapped the authentic product for a fake. Retailers or vendors may just outright offer a refund to make the customer happy and take the loss.
  3. The retailer reports the problem to the distributor but neither organizations have access to data to know who is at fault. They can only continue passing the compliant upstream in the supply chain and hope to uncover a bad actor in the finger-pointing blame game.
  4. An investigator needs to work with every upstream organization with hopes to uncover the bad actor (or human error). A low-cost and timely investigation to uncover the root cause is not possible.
  5. Luckily, this product had a unique identifier that is provably not tampered with and can be trusted (e.g. SKU, QR, BLE, RFID, etc.). Scanning this identifier offers additional data points for the product’s supply chain history, but the data may be limited because not every organization has permission to read/write data to the same tracking system. Organizations must still be investigated to obtain additional data points that are not shared by this product identification system.

Today, Amazon, Taobao, eBay, and many other large retailers have huge counterfeit problems. One in three products sold by third-party merchants on Amazon received at least one customer review claiming it was “fake” or “counterfeit.” It has gotten so bad that Amazon is purging thousands of long-time small, mom and pops vendors, including many innocent vendors who’s business and livelihoods will be destroyed as a result.

Applications powered by high-quality data (optional: stored on the blockchain) from inventory tracking and shipping carriers can be used to quickly resolve customer complaints for complex, cross-border networks.

Using IoTBlock’s universal API to develop high-precision supply chain visibility and product traceability applications can substantially cut down the amount of time and resources required to investigate counterfeit cases and furthermore enable many other benefits such as improved supply chain efficiences and collaboration between disparate parties.

Use Case: Supply Chain Finance

Another example of how blockchain applications will really shine when they can access trusted, high-quality supply chain data from IoTBlock, is a supply chain finance platform we are currently working on in partnership with a publicly-traded supply chain finance firm.

Supply chain data from all parties are obtained through IoTBlock to power traditional or blockchain applications for a Supply Chain Finance company. Real-time visibility of trusted data allows the finance company to offer more favorable loan terms.
Supply chain data can be acquired from trusted API sources, input into a blockchain or smart contract via our IoTBlock Blockchain Bridge, then output to third parties via API triggers or upon receiving payment.

Future-Proof Supply Chain as a Service

IoTBlock is unbundling wholesale supply chain services, replacing lengthy negotiations and onboarding with simple API calls. Our expanding APIs will allow companies to track freight and inventory, transportation assets, issue and verify signed digital invoices, authenticate accounts, verify identity, run KYC checks, aggregate transactional data, and a lot more. In the near future, the company will add RFID sensors issuance via API for parcel identification and tracking, supply chain finance as a service, and other exciting data-driven products to the mix, all at an extremely low cost. In the background, the company has secured partnerships with RFID sensors manufacturers, wholesalers, and cross-border supply chain management solutions providers.

Tier-1 enterprises are actively investing in and pushing for blockchain-powered supply chain consortiums.

In the advent that supply chain blockchain consortiums championed by technology giants such as IBM, Oracle, or Alibaba grow in popularity, IoTBlock will also be in excellent position to acquire or transmit supply chain and IoT data to these consortium blockchains.

Decentralized Supply Chain Oracle Network

Since blockchains cannot directly fetch data and relying on a trusted third party betrays the security of a decentralized, trustless model, IoTBlock is building a decentralized oracle network to allow its universal API’s to securely be feteched and outputted to any blockchain or smart contract.

IoTBlock’s decentralized oracle network uses cryptographic proofs to prove the fetched supply chain or IoT data input is authentic and untampered and can output to any blockchain platform.

Conclusion

IoTBlock acts a a responsive, agile middleware between software companies and its partner supply chain service providers’ core infrastructure. By abstracting away the complexity of legacy systems, IoTBlock makes rolling out a new supply chain product or service simple.

For the first time in history, individuals and companies of all sizes can “DIY” supply chain products, services, and solutions with IoTBlock API’s and tools without the need to employ a large tech team with deep understanding of legacy enterprise systems.

About IoTBlock

IoTBlock is developing a universal supply chain API to help supply chain tech entrepeneurs easily connect a new generation of digital applications to today’s complex supply chain infastructure such as shipping and cargo carriers, inventory tracking systems, and e-invoicing platforms, simplyfing their back-end development and accelerating their growth potential. Moreoever, IoTBlock is building a decentralized oracle network that enables secure connectivity between any API and IoT endpoint with any blockchain or smart contract, enabling unsiloed visibility of high-quality supply chain data between a network of trade organizations. Its global team is comprised of Berkeley, Stanford, and MIT-educated C-level executives, engineers, and research scientists specializing in supply chain, internet of things (IoT), artificial intelligence, big data, cybersecurity, and blockchain. IoTBlock has a vision to democratize trustless access to high quality IoT and supply chain data and services to promote innovation and sustainable global commerce through technology.

Stay connected with us!

Website: https://iotblock.io
Twitter: https://twitter.com/iotblock
Medium: https://medium.com/@iotblock

IoTBlock

Official publication for IoTBlock

IoTBlock (iotblock.io)

Written by

Democratizing Access to Trusted Supply Chain Data

IoTBlock

IoTBlock

Official publication for IoTBlock

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