Does the blockchain become an adult? Perhaps we are moving beyond the hype associated with cryptocurrencies and a real world of practical applications, such as the guarantee of trust among digital partners, with supply chain blockchains. In addition, GM Tradeshift Frontiers' Gert Sylvest states that we must be realistic, blockchain alone is not enough.
Is blockchain all hype, just like the Fidget Spinner?
I am a big supporter of the potential of the blockchain. I am strongly involved in the exploration and development of applications for the blockchain supply chain. We have initiated the first blockchain implementations on our platform to offer advance payments to suppliers and we are working with technology to improve transparency and traceability across supply chains.
We have always believed that the future of supply chains lived and died with its digitalization. The World Economic Forum states that the blockchain can "restore confidence in global trade" by ensuring that records can not be duplicated, manipulated or falsified and increased visibility in the supply chain. I share this vision – up to a certain point.
Blockchain and privacy: a form of distributed ledger can solve the problem of privacy?
I believe that blockchain has the potential to become a powerful mechanism to ensure trust between the distributed parties. However, emerging technology does not have control mechanisms to fully ensure that the transaction data to be answered is entered honestly and correctly. Taking a step back, I can understand the potential impact that this technology can have on the supply chain, but trying to look beyond the hype, we must be realistic about how to increase adoption and volume and not be carried away by itself. technology.
There are a number of fundamental challenges that need to be addressed before the blockchain can even begin to have the impact that many people claim:
- Adoption: Participants in the supply chain need incentives to join. Forty years of digitization and standardization efforts demonstrate that this has not been sufficient to move B2B digitization forward significantly. As recent challenges for industry players like IBM and Maersk indicate, blockchain supply chain alliances will not create value for participants unless governance and economic models imply a widespread and inclusive ecosystem. To offer real incentives to participants, we need to think of blockchain ecosystems as networks of buyers, sellers, banks and logistics service providers that each contribute to shared added value.
- Opening: players in the supply chain need incentives to join. But until all the components are connected in an open and digitalized network, this will remain a niche game for a handful of big business partners. We need to build the network of buyers, sellers, banks and logistics service providers, then offer blockchain functionality at the top.
- Governance: while blockchains provide secure registration of the entered transactions, the blockchain supply chain alone can not verify that the information entered is true and correct. In supply chains, where companies try to guarantee the origin of goods, protocols and governance must be set up to guarantee responsibility and mutual verification of information entered by each participant.
In theory, the blockchain provides a shared view of the transaction without disclosing certain sensitive data of buyers and sellers. However, blockchain alone is not enough. Any effective solution for the blockchain supply chain must be able to provide access to all users of the network and provide sufficient value in return, so that all parties have an incentive to participate.
A blockchain-as-a-service (BaaS) guide for CTO and IT leader
As the servitization business models continue to grow in popularity, it is natural that we are now witnessing the emergence of blockchain service offerings. Blockchain-as-a-service (BaaS) has established a strong presence on the market and is promising companies a way to use the much-publicized technology
Blockchain's ability to guarantee trust is often confused with the fact that it will safeguard and verify all transaction data that is entered. What we really need is a system that generates a "digital twin" for goods moving through the blockchain supply chain, but without proper governance, digitization and connectivity, blockchain alone can not support the global supply chain.
Will the blockchain radically reduce our increasingly digital and interconnected global economy? Yes. I have no doubt about it. But technology still has a long way to go before being ready to fully support global supply chains. If my experience has taught me anything, it is that the nature of innovation and technological progress takes time, the fundamental fundamental change never takes place from one day to the next.
They agree, but the expectations that the blockchain is a sort of cure-everything will delay and complicate the trip. If you think the blockchain supply chain is the answer to your problems today, you're probably not starting with the right questions.
The real revolution of today is not the blockchain, it is the digitization of relationships. However, the lack of digitalization and connectivity in the supply chain today remains the key barricade for the adoption of emerging technologies such as blockchain and artificial intelligence. The fact is that many of the use cases that are being published today for blockchain can be dealt with today's technologies, depending on 95% efforts based on current technologies.
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In all of the excitement and the clamor about the blockchain, we sometimes forget to look around and ask what established patterns and business models are there that can help us understand how to truly understand the potential of Blockchain.
Too often we make the mistake of starting with the technology. What companies are really attracted to is the idea of openness, transparency and sharing of value through a digitally connected network. If we can start by breaking down the boundaries where buyers and sellers work, we will unlock a more digital and transparent future, driven by the unlocked value by breaking down these boundaries.
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Once companies join digital activities, while the technology and the ecosystem around blockchain continue to mature, companies will be more ready to take advantage of what blockchain will soon have to offer.
Gert Sylvest, is GM of Frontiers, the arm of digital innovation of Tradeshift.