A couple of years ago, when Bitcoin seemed to be poised to completely upend global transaction systems, I had an inkling that the real revolution from the cryptocurrency craze would come from its underlying technology platform – the blockchain (see blog: Cryptocurrency’s Core Value Emerges). Judging from the buzz around blockchain at the Gartner Supply Chain Executive Conference earlier this year, I think it is safe to say that my instinct was right on the mark on this one.
As the backbone of a cryptocurrency system, blockchain acts as a distributed permanent database that records every Bitcoin transaction, and transmits this record real time to every node (independent computers) connected to the network to establish and maintain data authenticity. This is how blockchain technology can provide trust in a network without a central authority.
It was, and still is, a truly revolutionary concept that has more recently been adopted for a variety of applications outside of the currency realm. Australia-based everledger has developed a blockchain-based platform that brings the technology into the supply chain domain. The everledger fraud detection system creates a permanent ledger for diamond certification and associated transactions. The company asserts that their technology can be extended to track any asset that carries a unique identifier.
Another startup, Skuchain, is leveraging blockchain technology to develop supply chain apps for B2B trade and supply chain finance. Skuchain’s “vision,” according to founders Srinivasan Sriram and Zaki Manian, is to create a collaborative commerce platform, where trade partners can interact in a “frictionfree” manner, gain deep visibility into their supply chain to enable smart forecasting decisions, and be free from cash-flow constraints.
Blockchain has also captured the attention of some big dogs in technology like IBM, which recently launched its “Bluemix Garage,” in New York – a sort of skunk works for accelerating design and development of blockchain applications.
While blockchain is not likely to ever find its way into the commodity component arena, it is not hard to imagine that someday, some iteration of this technology could be deployed to prove provenance for high-end ICs, PCBs and sub systems, stopping the billion dollar counterfeit component market in its tracks.
Just what the future holds for this technology, I cannot say, but it is clear to me that blockchain has the potential to truly transform the B2B supply chain, making it stronger, more secure and, by eliminating (or at least reducing) fraud, more profitable.