What we currently know as 'The Blockchain' has had a very short and interesting history. Its origins can be traced to two scientists, Stuart Haber and Scott Stornetta. In 1991, the two worked on the issue of authentication of digital documents without the need for a trusted third party. This is where the concept of a cryptographically secured chain of data was first floated. Fast forward 31 years later and Blockchain has a multitude of real world applications, including lending, insurance, artist royalties, as well as supply chains and logistics. In this article we will cover the use of blockchain technology in global supply chains, how it has helped solve traditional supply problems and an example of companies that have adopted it.
In recent years, as most will know, the COVID-19 pandemic wreaked havoc on traditional supply chains. Most have still not recovered. But to understand what blockchain can do for traditional supply chains, we need to understand their well known shortcomings. Traditional supply chains are notoriously difficult to manage. The chain is long, complex and encompasses the globe's air and oceans, so ledger keeping can be a challenge. Small changes in consumer demand at one end of the chain can cause huge issues for production at the other. This is because each point in the chain only has limited information about the progress of the others, thus making both tracking and communication difficult.
A trustless immutable ledger may be a great solution to these issues. A blockchain provides a digital immutable ledger that is not dependent on any third party verification to determine if data is authentic. In theory, this may improve communication between points on the supply chain, while also making the tracking and tracing of goods simple and transparent. Some companies have already started to adopt blockchain into logistics. Examples are British Airways, DHL and even the United States Military.
A good example is DHL’s prototypes for blockchain in logistics. In 2018 DHL unveiled a press release regarding the potential they see in blockchain, specifically regarding pharmaceuticals and the healthcare industry. In a partnership with Accenture, a proof of concept was developed showing the blockchain was effectively able to track pharmaceutical products from manufacturing all the way to the patient. If implemented, this could result in less mistakes such as duplicates and a reduction in counterfeit drugs. This is significant as the counterfeit drug industry makes approximately $200 billion annually. These results are only possible thanks to blockchains immutable and trustless characteristics. If you would like to know more about how the blockchain functions we have a short explanation video here. Some cryptocurrencies have also seen the potential benefits they could bring to logistics.
Cryptocurrencies are also being created with a focus on logistics and supply. Just like DHL was an example of a logistics company employing blockchain, VeChainThor (VET) is a digital currency that has been purpose built for logistics and the 'Internet of Things'. VeChainThor aims to provide trustless data quickly, and ensure that it makes it to multiple parties at the same time. The team at VeChainThor believe that international logistics, supply chains, energy and healthcare will all find major benefits in digitising ledgers and records as well as saving on costs by having shareable real-time data that is trustlessly automated through the use of smart contracts. If you are interested in VeChainThor you can find it on CoinSpot here!
Recently it seems more and more companies are taking notice of blockchain technology and its potential benefits. As with any new technology it will take first adopters to truly discover how effective the technology will be in different situations. DHL’s exploration into blockchain and the positive findings related to their efforts are interesting. Use cases such as this combined with similar built to purpose cryptocurrencies and networks such as VET, WTC and others gives us a glimpse into blockchains capabilities. If you are interested in coins that focus on the supply chain we mentioned above, sign up to CoinSpot here and start trading today!