Blockchain is not a single technology. It is rather an architecture which makes it possible for participants to exchange value in the form of digital assets and create a nearly incorruptible secure record about this exchange without central recordkeeping. Each participant gets a copy of those data records and each record’s authenticity can be verified by the entire community using the blockchain instead of a single centralized authority.
Because the blockchain is a distributed system of record serving as an open ledger, it gets essentially applied to use cases where many weakly connected parties are involved, like for simplifying cross-organisation operations in freight transport or increasing supply chain transparency.
While blockchain is on its way to largely influence business processes and trust models across various industries, it is still in its early days. We see on the market a constant evolution of systems and implementations with quite different qualities deriving from the blockchain architecture. As popular open source platforms which, we believe, can help you rapidly prototype your distributed ledger use case, we suggest to look at Hyperledger, Ethereum, Corda or IOTA.
The availability of analytical tools on blockchain data currently remains limited. There seems to be only very few companies focused on analytical use cases like for instance Chainalysis who provide compliance and risk investigation software for blockchain-based cryptocurrencies. SAS also built a prototype for investigating transactions on the bitcoin blockchain. As blockchain technologies gradually mature, specific analytical use cases will have to be accordingly designed and implemented. Also incontext.technology is currently evaluating the creation of an analytical application on blockchain data for some audacious customers.
Blockchain technology is not a fit for every transactional business process. It generally gets considered in use cases where trust between loosely related parties is involved. Which factors have lead to the increased interest in different trust models? Why is it seemingly becoming critical to introduce technologies which are able to establish many-to-many trust relationships without intermediaries?
A part of the answer lies in the intense transformation of commerce through technology in the last 20 years. E-commerce arose from the technological development of the World Wide Web giving companies a way to offer much larger product catalogues to a much larger customer base. Companies faced a globalized competition on price and a wide need for business process optimisations. Since then, we entered the experience and engagement economy as a response to the constant and ever-faster evolution of customer expectations. The rise of big data and artificial intelligence technologies made it possible to better understand demand and provide more personalized answers with an inflation of customer data available.
The next chapter in the technology-supported evolution of commerce appears to be the evolution into a trust and transparency economy. As exemplified in a report by Fortune, the blockchain applied to the food industry might be an opportunity for food giants:
"to revamp their data management processes across a complex network that includes farmers, brokers, distributors, processors, retailers, regulators, and consumers".
As the whole industry gets involved, companies would optimise their administrative and business processes. Digitised information on blockchain would reduce the amount of paperwork in the supply chain with many potential benefits like:
- increased accuracy of records
- reduced fraud risks
- decreased number of invoice disputes
- improved visibility of orders across the supply chain leading to a more proactive inventory management
In addition to making ecosystems in the food industry more efficient, such an integration would also result in system qualities which are essential in the evolution of trust relationships with customers and regulatory agencies: accountability, transparency and traceability. Those qualities are required to cover areas described in the diagram below, especially:
- food safety with a fast tracing of affected items to their origins within minutes or even seconds
- regulation compliance through direct visibility by regulatory agencies on legally required information or certifications
- food labeling by ensuring the integrity of the marketing claims which consumers could verify by simply using a QR code scan.
A successful blockchain implementation for food traceability has been done by the French grocery chain Carrefour. They are tracing their Auvergne-based chicken product and will extend to eight new product types by end of 2018: eggs, cheese, milk, oranges, tomatoes, salmon and ground beef steak. According to the company, the system guarantees complete product traceability by requiring every party along the supply chain — producers, processors and distributors — to track their activity. More and more people want visibility into what is inside the products they buy. They want to be able to make responsible and trustful food choices for themselves and their families and blockchain might help to establish that trust. Just like Carrefour, retailer Wallmart as well as suppliers like Nestlé or Unilever have also started several blockchain initiatives.
Blockchain technologies have the capacity to foster digitisation, optimise complex business processes and enable new kinds of engagement models. They make data available at large scale to loosely related parties. Combined with suitable analytical models and appropriate user experience designs, this has the potential to create new foundations for our economic and social systems. It's the right time for companies and institutions to begin experimenting with blockchain to get a better understanding of specific applications to start thinking bigger. Let's discover how blockchain may affect your business. We would be thrilled to pave the way for this transformation together with you!
Nolan Bauerle. What is the Difference Between a Blockchain and a Database. Source: https://www.coindesk.com/information/what-is-the-difference-blockchain-and-database/, visited on 30.05.2018 ↩︎
Lucas Mearian. Maersk, IBM create world's first blockchain-based, electronic shipping platform. Source: https://www.computerworld.com/article/3247758/emerging-technology/maersk-ibm-create-worlds-first-blockchain-based-electronic-shipping-platform.html, visited on 30.05.2018 ↩︎
Paul Martyn. Does Blockchain Provide The New Standard For Transparency? Source: https://www.forbes.com/sites/paulmartyn/2018/03/28/does-blockchain-provide-the-new-standard-for-transparency/, visited on 30.05.2018 ↩︎
Sam Penfield. A practical approach to blockchain analytics. Source: https://blogs.sas.com/content/sascom/2017/12/15/practical-approach-blockchain-analytics/, visited on 30.05.2018 ↩︎
Robert Hackett. Walmart and 9 Food Giants Team Up on IBM Blockchain Plans. Source: http://fortune.com/2017/08/22/walmart-blockchain-ibm-food-nestle-unilever-tyson-dole/, visited on 30.05.2018 ↩︎
Pauline Neerman. Carrefour uses blockchain to create "transparent" chicken. Source: https://www.retaildetail.eu/en/news/food/carrefour-uses-blockchain-create-transparent-chicken, visited on 30.05.2018 ↩︎
PYMNTS. Blockchain Shines Spotlight On Carrefour Supply Chain. Source: https://www.pymnts.com/blockchain/2018/carrefour-supply-chain-grocery-retail/, visited on 30.05.2018 ↩︎
Marco Iansiti and Karim R. Lakhani. Harvard Business Review. The Truth About Blockchain. Source: https://hbr.org/2017/01/the-truth-about-blockchain, visited on 30.05.2018 ↩︎