To understand more, Digital Journal met Angel Versetti, CEO of Ambrosus. Angel is a recognized blockchain authority and frequent speaker on innovation, technology and economic development, and his company, Ambrosus, is a decentralized IoT network designed for next-generation supply chains.
Digital Journal: How important is the blockchain for businesses?
Angel Versetti: Blockchain is destined to radically alter the current business models. The reason for this is that blockchain is a flexible solution that companies can use to improve efficiency or access new markets. In simple terms, when we ask how the blockchain will revolutionize the business, we mainly refer to how blockchain can store, protect, process and better configure the data that a company must immediately use or which serves as a trusted placeholder.
As such, if there are activities that suffer from lack of trust, heavy centralization or general inefficiency, blockchain will be able to radically transform that industry. To cite a couple of business use cases: blockchain will first and foremost make financial and financial services easier, more accessible (global) and more reliable. In other sectors, blockchain will help cut average men to enable more efficient and accessible business models – this is particularly true in the entertainment sector, with development aid and with online advertising and betting. Finally, blockchain will absolutely transform the intelligent management of supply chains, farms and cities by recording and configuring data in previously unimaginable ways; improve logistics, brand flows and product flows.
This last point is exactly what Ambrosus uses to make a blockchain, in order to make the supply chains more transparent, consumer-oriented and environmentally-friendly.
DJ: what are the current weaknesses with supply chains?
Verses: Supply chains today are responsible for the transfer of most food, medicine and commodities worldwide. These are enormous processes that can be extremely complex; a product could change hands seven to eight times before it reaches for the consumer's purchase. There are numerous and significant weaknesses and challenges in modern supply chains. Chief among these is the difficulty of guaranteeing the quality of the products.
Because supply chains are so large, it is very easy to counterfeit or dilute products and distribute them as original. Not only is this bad for businesses, it is also a public security problem. Secondly, in the current supply chains the data are "separated" by the various stakeholders. This means that there is not a regular flow of information between the different actors involved and, as such, much time is wasted in the management of supply chain logistics and ensures that all products can be accounted for in a timely manner. Thirdly, the lack of transparency in supply chain processes leads to unfair commercial practices, in which some stakeholders (such as farmers or producers) can be exploited unfairly.
This could even lead to global monopolies of entire industries. Another weak point arises when the lack of information and planning leads to inefficient and environmentally damaging management practices. In this situation, companies do not have enough information to move their products as efficiently as possible, nor have they devised environmentally-friendly recycling techniques. Finally, the lack of overall planning and management of supply chains is also a threat to national security in the event of natural disasters, cyber attacks or any large-scale interruption. On average, it is estimated that the stores will be empty within 3 days in the event of a large-scale supply chain interruption.
DJ: how can blockchain improve supply chains?
Versetti: Blockchain brings trust, transparency and responsibility to the data it stores. In the context of supply chains, blockchain can help to demonstrate the quality of products, where they come from, how they were purchased and where the product has traveled. For logistic purposes, blockchain can protect private data for companies and enable them to interact with such data in real time in order to plan their shipments more efficiently, request an insurance or identify a problem and recall easily a product in question. For consumers, blockchain can help increase trust in specific products as well as develop brand awareness for businesses. At a deeper level, a public blockchain is a validator of the truth; helps to demonstrate that the information required in relation to a product or supply chain process is accurate and not fraudulent. Once this is known, it is very easy to configure this reliable data in creative ways to save money, make businesses more equitable or to benefit the environment.
DJ: are there any weaknesses?
Verses: A noteworthy point is that blockchain alone can not guarantee that data that validates from the supply chain is true, unless the data comes from an encrypted or secure source. This requires the use of Internet of Things (IoT) technology. While many companies claim to provide a blockchain solution to supply chain problems, a real solution must be holistic: the smart devices used to record data must also be secure, in order to have confidence that the data entered into the blockchain is reliable. This is exactly what Ambrosus does by designing and synchronizing the intelligent objects with the Ambrosus blockchain. This creates an end-to-end solution so that all data used to demonstrate the quality of a product or to help plan supply chain disruptions can actually be validated as true.
DJ: Tokens are necessary for this?
Yes, tokens are necessary because they are the fundamental reserve of value in a decentralized and public blockchain. To create a transparent network that can be protected by anyone in the world, a token is required to allow other people to use the network in an accessible way. Tokens can be programmed via smart contracts and as such allow the configuration of the network in which those who choose to participate have a clear interest and responsibility. In simple terms, tokens help to configure the "rules" to operate or make use of a network. Depending on how the crypto-economy of a system is designed, it is possible to provide different responsibilities to different stakeholders based on their interests and financial resources. For example, with Ambrosus (whose system was designed by Professor Roger Wattenhofer), depending on the amount of Amber staked, it is possible to protect data entered into the network, upload data on the network or validate transactions that occur on the network. With tokens, when you perform your own specific operation on the network correctly (as anticipated in advance) they can automatically be rewarded for the services they have provided.
DJ: are there any non-token solutions?
Verses: For a solution that does not use a token (that is, that which is private rather than public or decentralized), there is no incentive to use blockchain honestly. In this scenario, a company can own all the nodes on a blockchain and edit or modify the data entered at any time. As such, if you keep the private blockchain, you are practically using only a sophisticated database that should not be trusted by consumers or any type of professional agency. This is because the keys to the network are held by financially motivated stakeholders who can not be held responsible for their actions.
DJ: What are the advantages for blockchain companies and consumers?
Verses: For companies, the advantage is that they can have full control of their data while demonstrating their authenticity and quality. The company becomes a placeholder of trust because it has entered its information on a public network verified by a number of different nodes, and not only by themselves. Therefore, companies are going to build a better brand, while providing new and unique services to their customers. In the context of the supply chain this would imply proof of the origin of the products – which comes all from a certain geographical position, which has been organically harvested and so on.
At the same time, consumers benefit greatly from a decentralized blockchain because they are confident that the data being marketed for them is accurate and truthful; since all data on a public blockchain has been validated by various node operators rather than by the company itself, consumers are able to believe that the products they have are actually what they claim to be. This is especially true of high value products, foods and medicines. In addition to the supply chain, consumers benefit greatly from a decentralized network structure, in which no central authority has the ability to censor or modify the rules as it sees fit.
DJ: What is the future potential for the blockchain?
Verses: It must also be said that all the advantages of the crypto-economy have not even scratched the surface of what they could be. Something Ambrosus is currently examining is the ability to "bend" the global economy industries among themselves through their crypto-economic model. For example, consider whether a large pharmaceutical company pays the Ambrosus network to validate and archive its data.
So, imagine if a non-profit organization has acquired a node on the Ambrosus network to protect the same data: a new flow of precious data can actually be created and transferred from the global pharmaceutical industry to the organization non-profit, simply because they both use different utilities on the public network. The pharmaceutical company obtains the archived and validated data and the non-profit organization receives the awards from the network to make sure that this data is stored correctly. The utility is effectively transferred from one area to the global economy to another, seamlessly and with benefits for both parties involved.
In a follow-up interview, Angel Versetti focuses on supply chains and how blockchain can help with scalability. See: "Questions and answers: decentralized IoT networks help next-generation supply chains."