Blockchain is not going anywhere anytime soon, according to supply chains
- May 21, 2021
- Posted by: Aelius Venture
- Category: Blockchain
A Gartner analyst characterised blockchain’s “irrational exuberance” in February 2018, a word that is associated with a 1996 Alan Greenspan speech warning of an overvalued industry. On the Gartner hype cycle, Blockchain has gone past the “Peak of Inflated Expectations” and has been met with a lot of negative coverage. Despite the negative press, the future advantages to supply chains suggest the blockchain will not go anywhere anytime fast.
Blockchains may have started out as the backbone of cryptocurrencies, but their applications are far more diverse. VC support for blockchain start-ups had already crossed 40% of last year’s total in the first three months of 2018. It has been applied to almost everything that has the ability to solve issues in both the public and private sectors. The list goes on and on, from immigration, transportation, and land registry to gaming, software creation, and supply chains. The blockchain is the game-changing technology.
Three reasons for scepticism are mentioned below, but there are several others:
- Overuse: Blockchain is not suitable for all applications. If the use case is mainly within an organisation, a secure central database or similar technology might be more appropriate. Don’t use blockchain in situations where it isn’t really required.
- Loss of ownership: When it comes to blockchain implementation, some parties are concerned that data will be exchanged in order to increase overall visibility of the process among stakeholders. If this is a stumbling block, consider other options. The blockchain provides near-complete transparency.
- Regulations and technology: Regulations such as the General Data Protection Regulation (GDPR) place strict criteria on an organization’s data processing procedures. However, some of them are incompatible with the blockchain’s immutability features. Of course, architectural trends for how blockchain and GDPR might comply over time will emerge. In the short term, though, this creates doubt about how technology will support such requirements, which adds to the confusion.
Skepticism is a healthy response to the blockchain’s arguments. Why do you use blockchain over other tools that have been around for a long time? It’s never easy to change, particularly when it comes to a disruptive technology with big goals. Record-keeping, improved protection, and transparency are all ways that blockchain can add value. When there are a large number of people who need access to information, trust and validation are crucial, and access levels must be controlled, blockchain comes into its own.
Do you doubt the hype?
Blockchain demonstrated its ability to achieve absolute traceability, as well as increase performance, protection, and speed, in a recent supply chain proof of concept (PoC). The use of blockchain in global supply chains isn’t a gimmick: it’s happening now. It is currently taking place.
For example, tracing a box of mangoes back to its source takes around 18 hours. It can be achieved in two seconds or less with blockchain. The protection and trust that blockchain provides to a system generates value in and of itself. Porsche recently revealed that it would incorporate blockchain technology into its vehicles, allowing owners to perform functions such as locking and unlocking the vehicle using an app. It will also make it possible to issue temporary access authorizations quickly, conveniently, and safely. Furthermore, if one point in a decentralised framework like blockchain is breached, the system’s protection is not jeopardised. Unlike what happened with Jeep in 2015, when hackers exploited a software vulnerability to remotely take control of cars – in one case, while the vehicle was being driven at 70 mph.
It is not just supply chains involving physical products that profit from blockchain in this digitally-dominated era. Blockchain-enabled encrypted DevOps is transforming software supply chains, resulting in quicker releases and better, earlier bug detection. Because of the transparency that blockchain provides, project status reports can be provided in real time, even when the process includes geographically scattered, remote teams of vendors, contractors, and/or partners. Similarly, blockchain can be used to verify the provenance and security of digital goods, which is becoming increasingly useful in our hyper-connected world.
Newer protocols like Intel’s Proof of Elapsed Time are on their way to solving early problems with blockchain technology, such as the amount of computing power needed or the amount of storage required (POET). Interoperability between the various systems of distributed data ledgers is expected to become a problem as blockchain matures and acceptance spreads. A smart city, for example, may have several separate blockchain-based structures governing its various services, all of which must eventually work together. To fix this problem, Google, among others, is developing blockchain lattices (also known as “blockchains of blockchains”).
The Blockchain and Supply Chains
Although some of the blockchain’s most significant real-world effects might be years away, there is no denying that the hype around this technology is justified. Already, the hysteria is giving way to more grounded, real-world examples and use cases in a variety of industries. Supply chains were among the first to reap the benefits. The supply chain visibility, protection, asset tracking, and IoT domains would also gain significantly. The use of blockchain in smart cities and vehicle-to-vehicle interactions is starting to emerge. There will be even more to come.
There are many problems that blockchain can solve. However, Blockchain is not the problem. So, it’s time to put an end to the blockchain smear campaign. “IT leaders must cut through the hype and implement blockchain for full benefit,” according to a February 2018 Gartner study. Blockchains are still in their infancy.