Blockchain is best known as the technology used by Bitcoin, but its possibilities reach beyond a financial function. It can serve many more purposes.
Experts have called the technology the most important invention since the internet. And I am convinced that this new technology will bring disruption to many industries.
Supply chain is one of the areas that will see big changes in the short term. I am discussing 4 altcoins that have the power to disrupt.
After reading this article, you will understand why.
What is blockchain?
Blockchain is a database accessible to many users. It consists of shared ledgers (or blocks) that form a blockchain.
The ledgers or records can be consulted, and new ones can be added by everyone. The original information, however, remains intact and cannot be changed or deleted, which makes it fraud-proof.
Another unique feature of the technology is that the information is not owned by one organization. This means it can be used throughout a whole supply chain (and even beyond) while leaving a permanent and public information trail of transactions.
Blockchain in the supply chain
Applying blockchain within supply chains allows consumers to follow the complete history of a product: from its origin to its last owner.
Imagine as a consumer you can check if the product is indeed fair trade, as it claims; if the seller is the rightful owner, in case of second-hand products etc. It offers enhanced transparency and traceability about products at any moment in time.
Applications in Supply Chain Management
Lately, organizations have started combining blockchain with other technologies, like the Internet of Things (IoT) or RFID. This has led to interesting projects, solving different problems in supply chain management.
Let’s look at a few examples that are currently developing.
Waltonchain is set up by a group of Chinese and Korean pioneering engineers. They combined a blockchain platform with the hardware of RFID chips. This combination they call the Value Internet of Things (VIoT).
Waltonchain offers a parent chain – child chain structure. This structure connects various organizations and industries within a supply chain according to their needs. Every enterprise can customize a child chain by expending Waltonchain Coins (WTC).
The more enterprises add a child chain, the more the ecosystem will grow. Like a vicious circle, the growth of the ecosystem will, in its turn, increase the demand for WTCs.
Their goal is to serve the real economy by offering data integrity for fair audits, traceability, security, and authenticity. So far they have set up several projects with different organizations, ranging from clothing to smart cities.
They expect future applications of Waltonchain to follow soon, among others, in smart medical care and agriculture (food traceability).
The VEChain foundation offers a global enterprise level public blockchain platform. This non-profit organization applies blockchain technology in several industries like transport & logistics, automobile, health care, agriculture, and fashion.
Its solution includes a comprehensive governance structure, an economic model and integrated IoT technology.
So far they have set up many interesting projects. One of them is the cold-chain logistics solution, in which IoT devices track key metrics throughout the whole journey of a product.
As an example: if oysters arrive spoiled at their destination, it can be quickly tracked if all necessary environmental conditions, like temperature and humidity, were met during the whole journey.
It becomes transparent who is to be held responsible and what can be done to avoid this loss in the future. This kind of solutions can solve commonly occurring problems and improve supply chain management.
Another example of a project is the digital passport for cars. In this passport all data about the car is recorded, like repair history, insurance registration and even driver behavior throughout its lifecycle.
In case an accident occurs, the owner of the car can give access to the passport to other parties, like the repair shop and the insurance company.
This enables a smooth collaborating between all parties involved and relieves everybody from the bureaucracy of sending documents back and forth.
The infant formula scandal in 2008 in China motivated WaBi’s founders to use blockchain technology in combination with RFID labels to fight counterfeit.
Consumers can scan Walimai labels (RFID chips utilizing NFC technology) on products. This will tell them whether the product is authentic or counterfeit. By scanning products, they are rewarded by WaBi’s loyalty system. The more they scan, the more WaBi tokens they collect.
The advantages to the consumer by using WaBi are the guarantee of buying an authentic product and the tokens he receives. These tokens will give him certain benefits like discounts, improved delivery term and bonus WaBi with every purchase.
For participating companies the benefits are threefold: they learn about competitive counterfeit products in the market, they gather consumer behavioral data, and they have an extra consumer retention program, stimulating loyalty to their brand.
And there is Seal. They also offer a blockchain powered product authentication and services platform, fighting counterfeit but they do things a bit differently.
Seal choose to work with Ethereum blockchain platform and mining-network as software in combination with NFC chips.
Where most providers use RFID chips, Seal believes NFC chips are more sustainable as they are uncrackable and not so easy to copy.
Even more important is that they made the chips dynamic: every time you interact with them they change. So even if you copy a chip, they will be out of sync with the blockchain, which makes the hardware more secure than those used in other solutions.
Claiming ownership during the entire lifecycle
In Seal’s blockchain solution users can claim legal ownership of a product. This is useful for collectors of valuable products like art, wine but is also interesting to insurance companies to prevent theft and fight fraud.
An example: when buying an item the purchaser can check if the seller is the actual owner. Suppose you want to buy a refurbished iPhone, you wouldn’t want to get in trouble by buying a stolen one.
When you scan the product, you can see who is the rightful owner. If it is the person selling, you can buy the phone with confidence. The ownership can then be transferred to you.
If it gets stolen, you can mark it stolen. When it is sold on, and someone tries to claim it, he can see it is stolen, and the authorities can be notified. Note that this feature is a function they are still working on since it involves all kinds of privacy laws, but you get the idea of the possibilities.
To transfer ownership, a token has to be paid. This provides proof of authenticity on the product and, at the same time, enables brands to monetize on a product after its initial sale.
This works particularly well with collectible items, such as sneakers, jeans or art. With all the other providers the journey ends when the end consumer owns the product.
For Seal, it doesn’t stop at the point of sale. It just starts there. As long as the chip is integrated into the product, authenticity can be checked, and ownership can be transferred, even after the brand stopped existing.
Fighting fake products
The reason Seal started working on their anti-counterfeit platform is because they believe designers, artists, scientists, programmers, and creators should be appreciated more for the work they do. That is their motivation.
To fight counterfeit, they are also part of the International Anti-Counterfeiting Coalition, as the only blockchain technology company. Actually, one of the advisory members is the founder of REACT.org, an EU based Anti-Counterfeiting Network that spans 90 countries. They are clearly on a mission!
This revolution has just started!
It is obvious that we are at the beginning of an exciting new era with lots of developments to be expected in the years to come.
Bitcoin may have been the most famous cryptocurrency and application of the blockchain technology so far… but after reading this article, you know there are many more altcoins out there that use blockchain for a lot more than just financial transactions. And these are just a few examples.
There are many more innovative solutions like OriginTrail, the first purpose-built protocol for supply chain based on blockchain technology; or Ambrosus, a protocol to guarantee quality and safety of food and medicinal products; or Modum, a solution for the pharma industry that checks environmental conditions of goods in transit and predetermined conditions in a smart contract, before finalizing delivery.
All of these solutions will improve supply chain management for all parties in the chain. Not only suppliers will have the advantages of these developments. Also, the consumer will benefit from the transparency it brings, knowing they can trust the information about the origins or authenticity of his product with certainty.
This is truly a remarkable innovation, which will completely disrupt the existing supply chain in the coming years. This revolution has just started!