The technology behind cryptocurrency is breaking away from its financial services roots and making a big impact in all kinds of industries.
Since blockchain was introduced to the world as the technology behind bitcoin a decade ago, it has been linked to cryptocurrency.
Many of its proponents, such as technology strategist Don Tapscott and ex-UBS CIO Oliver Bussmann, have been championing its potential outside the realm of financial services for years, but its uptake in other sectors has been cautious. There is now a groundswell of use cases.
“The problem with blockchain is that people are speaking about it like they did with routers and switches in the late 1990s,” says Saleem Khan, global leader for data innovation at business data services company Dun & Bradstreet (D&B). “It took years to develop and leverage the foundational technology of networking in order to create what we now call the World Wide Web. But no one cared about the underlying technology until giants like Google made the internet mainstream and accessible. In the same way, blockchain will be a success if we can determine how to harness its decentralization and distributed ledger concepts to meet critical business needs.”
Now a selection of IT leaders are trying to figure out how to do just that and pave the way for a blockchain revolution within their industries.Blockchain for the supply chain
Retail might seem an unlikely place for a blockchain transformation to begin, as Nikki Baird, VP of retail innovation at commerce platform Aptos, acknowledges: “Retailers tend to be conservative adopters of technology.”
But she is optimistic that blockchain is going to shake up the sector beginning with its impact on supply chains. “Most of the focus is on traceability, using blockchain to create a universal record of a product for supply chain security, country-of-origin tracking, and to speed up the import process.”
Nestlé is one company doing exactly this. Benjamin Dubois, digital transformation manager for global supply chain at the food and drink giant, explains how improving product traceability is a key factor in strengthening consumer trust. Nestlé is constantly exploring how it can use the technology to achieve this with minimum complexity and cost. In 2017 it began testing blockchain as a solution for tracking pumpkins shipped from US farms that are a key ingredient in one of its baby foods. After a successful trial Nestlé increased the complexity to track multiple ingredients, and introduced cross-border tracking from countries such as Columbia. As it did so, it was careful to ensure that the user interface remained simple.
Dubois explains: “The food value chain is very complex, with many different actors working together. Blockchain allows secure recordings of the information and data from those various actors in a transparent, verifiable and immutable way. The data can be easily and securely shared across many players in the supply chain, but only those involved have access to the [resulting] information. Ingredients and products can be traced end to end in a matter of seconds, faster than current systems would allow.”
Despite seeing initial success, Dubois is cautious. “It may still have to be proven at scale, especially where and how the benefits will be captured,” he says. “So it is something that we will continue
to explore.”Trust in information
The increased trustworthiness of information recorded on a blockchain is a feature that D&B’s Khan believes is well suited to the marketing and advertising space. He sees blockchain as having the potential to offer a solution to issues such as advertising fraud, privacy concerns and customer identity verification. “With ad fraud, 50% to 60% of clicks are bots and marketers often struggle to determine whether a click is a bot or genuine customer. Blockchain can help reduce fraudulent bots through a robust onboarding process, which verifies any entity clicking on an ad.”
D&B itself is exploring how blockchain technology can be used to enhance its verification process. It is testing appending a blockchain ID to the D-U-N-S Number given to each business location stored on its system. This would enable companies to trade, provide credit and give loans with greater certainty, knowing that when they search for a company within the D&B blockchain and see it has a corresponding D-U-N-S Number, the details are correct and that company can be trusted.
Being able to trust and verify information is also key within the oil and gas sector. Health and safety is clearly a big concern in that industry, and being able to verify all security certifications on a blockchain could turn a process that today takes weeks into one that is processed in a matter of minutes, according to Frederik de Breuck, head of Fujitsu’s Blockchain Innovation Center
.The immutable ledger
The immutability of blockchain data makes the technology ideal for dealing with goods where provenance and authenticity are key. Icons.com, a leading sports memorabilia company, has recently announced a collaboration with digital agency Zone to launch a blockchain application to combat the counterfeiting of the signed items it sells. It plans to upload 50,000 signed assets to the Icons B-locked blockchain-based platform in coming months. Each item is assigned a unique ID that will be stored in the ledger along with evidence of the signing and history of the product, “proving its authenticity beyond all doubt.”Finding business value
Fujitsu is one vendor that has seen the interest in blockchain surge. It is encouraging its customers to carefully work out genuine use cases for the technology rather than jumping in. As de Breuck, from Fujitsu’s Blockchain Innovation Center
, says: “Even without blockchain you can solve a lot of problems and do it more efficiently. It’s not a fix-all, it’s not a holy grail, but it helps in some areas.”
To help businesses understand whether they will benefit from a blockchain solution, Fujitsu has developed a proof-of-business framework that can be executed over the course of a week.
The group went through this process with a customer in the pharmaceuticals sector. The customer initially wanted to use blockchain for its ‘electronic lab books,’ documents that prove and guarantee the correct steps have been taken in the development of a drug. The immutability of blockchain was again the main appeal.
In the end, the customer found the most viable use case for its environment was in the area of cross-licensing and not lab books. “They had already invested so heavily in the control functions of their lab books that changing for the benefit of immutability would produce no ROI,” says de Breuck.
“And that’s the whole point. For us it is important that companies find the right use case, work out how to integrate this technology and ensure there is ROI or a wise investment for compliance reasons.”
Fujitsu is also trialing blockchain technology for document management. Having identified a cross-sector problem with the management of invoices, the ICT company is looking to apply smart contracts to route and manage multiple invoices by linking the purchase-order code of the buyers to the actual invoice of the sellers and making one immutable track. De Breuck notes in large companies that up to 10% of invoices encounter a problem; fixing even a small portion of that number will result in huge benefits.
Fujitsu is also looking to tackle the scourge of 21st-century publishing: fake news. Chris Pilling, lead architect at the company’s Blockchain Innovation Center
, explains: “We mean fake news both in a social media sense and in a corporate sense around documents and information leaving a company without having the proper approvals.” Third parties who receive the information will be able to verify its authenticity in a couple of clicks via a tamper-proof audit trail. Speculating about the potential future use on social networks, Pilling suggests that users of the various social platforms might one day be able to check if the story they want to share comes from a source with this immutable stamp of authenticity.
As industries learn from each other and blockchain is adopted across sectors for its security benefits, provenance tracking and immutability, or ability to decentralize processes, its impact on business and society will grow exponentially.
The beta tests and examples mentioned here are all paving the way for what many expect to become a mainstream technology. And that process should begin now, as Khan says: “IT leaders should consider taking their high potential engineers and training them up in this new technology in order to modernize their processes and meet customer needs.” Blockchain solutions for humanitarian aid
The World Food Programme (WFP) is leveraging blockchain to distribute cash for food aid to thousands of Syrian refugees. Its Building Blocks pilot is using the technology to transfer cash to individual refugees, avoiding inefficiencies and costly transfers from working with regional banks. The WFP says: “As of January 2018, more than 100,000 people residing in camps redeem their WFP-provided assistance through the blockchain-based system. Thanks to the technology, WFP has a full, in-house record of every transaction that occurs ensuring greater security and privacy for the Syrian refugees. It also allows for improved reconciliation and the significant reduction of third-party costs. Beyond cash-based transfers, WFP is also interested in exploring using the application of blockchain technology in areas such as supply chain operations and digital identity management.”