Blockchain - Boone and bane
Blockchain - the big unknown technology
on which all cryptocurrencies are based. Will this technology revolutionize the
entire information system sector and hence many functional areas of
organizations?
Yes, it will and it already
does!
But how does a blockchain work? Well a
blockchain consists of many blocks which are linked and secured by cryptography.
Let me give you a quick example of a blockchain transaction:
First of all, someone needs to request
or initiate a transaction. This transaction is broadcasted to a P2P network,
where the user and the transaction is validated using known algorithms. This
kind of transaction can consist of a document, contracts or any other kind of
information. Once this transaction is verified, e.g. creating a digital document,
it is the basis for all other upcoming transactions and is used as the basis or
first block of the upcoming chain respectively process. In a next step, another
transaction, e.g. sending this document to another party, is built on the basis
of the block of the previous action. The previous block has been created with a
known algorithm and is permanent and unalterable and this same algorithm is
used for the basis of the next block within the chain.
But what is the exact
advantage using this technology?
It is quite obvious: It is data
protection and safety; the information of the blocks cannot be manipulated;
human errors within this process will be eliminated to a marginal residue; and
last but not least this blockchain will maximize transparency and traceability
within the entire process. So, there is no possibility of fraud!
But do all companies pursue
a complete transparency within their processes?
Especially, when it comes to
commodities like lithium, coffee or any other kind of raw material originating
from Third World countries; the commodity hub in Switzerland is probably not in
favor of installing a blockchain for those processes to ensure traceability.
But are there any current
examples where a blockchain is already in use?
Well yes there are. For e.g. Walmart
already has a collaboration with IBM using blockchain in order to ensure
traceability and transparency for their fruits coming from all over the world
and therefore delivering a higher value to their customer.
Another example is the collaboration of
IBM and Maersk. There were creating a digital distributed ledger to create a
single electronic place where all the myriad documents related to a shipment
could be housed. So, the blockchain will give clearance for personnel - like a
truck driver - to pick up a load. A relatively recent trend in logistics is
fictitious pickups. These occur when con artists show up at a shipper’s
dock, provide fabricated insurance documents, Bills of Lading, DOT numbers for
trucks, and pickup documentation.
But those fabricated documents will not
be accepted by Maersk due to the fact that the basis of this process was initiated
by Maersk (issuing shipping documents for the other party). And this attempt of
fraud will be detected by a blockchain.
Furthermore, Natixis, IBM and Trafigura
introduced an entire supply chain finance blockchain platform.
According to Arnaud Stevens, Natixis’
New York Head of Global Energy & Commodities:
“Natixis wants to use blockchain to
enhance client service by optimizing the antiquated arena of commodity trade finance,
the current process is paper and labor intensive, we have multiple friction
points with high processing costs and limited automation. Distributed ledger
technology brings some much-needed innovation into our industry.”
So just like I mentioned above: Trade
documents, shipment updates, delivery and payment status can be shared across
all parties being involved in order to reduce transaction time, avoid
duplication of documents and improve authentication processes.
As you can see, there are already many
examples of a blockchain in use. But we will see what the future would hold
since this technology is yet to mature!
References:
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