By Chelsea Virga
First, there was Bitcoin. Then, Ethereum. Soon, Ripple.
The great influx of investment into the cryptocurrency space seems to have saturated all mainstream media with headlines either highlighting the great profit potential of these assets or warning of the eminent collapse of the “Bitcoin Bubble.”
However, people are becoming increasingly aware that cryptocurrency is not solely a short-term instrument for speculative investments, but more so a virtual network built upon Blockchain technology that will vastly impact the functionality of our world. JPMorgan Chase & Co. CEO Jamie Dimon recently stated he “regrets” his initial very public and very critical comments on Bitcoin due to his realization that “the block chain is very real.”
The block chain is a public ledger that records digital data or events in a way that is publicly accessible to inspection by all but cannot be manipulated or tampered with. In this way, Blockchain technology can be utilized for more than just traditional currency purposes like payment processing (such as in the case of Bitcoin.) Rather than assigning a monetary value to each coin, physical goods can be linked through cryptography on the virtual ledger; this in turn can expedite a more transparent and efficient logistics process between suppliers and vendors. Such technology will have an extremely transformative impact on the future of the manufacturing, logistics, retail, and transportation industries.
In the case of manufacturing, Blockchain technology is allowing for physical goods to be assigned identification numbers, codes, or tags that can validate each product’s authenticity and location. These digital footprints can be tracked and recorded onto the ledger as it is assembled, delivered, and ultimately received. The creation of value is particularly great in cases when the goods being transported are sensitive and costly. In the transportation space, such a ledger gives transparency on the replacement, configuration, and status of unique and proprietary equipment parts. At the 2017 Paris Air Show, Accenture’s head of Aerospace and Defense asserted the value of Blockchain, saying it can reveal a “single point of truth of what has happened to [an] engine.”He noted he believes Blockchain will become increasingly prevalent in the next couple years.
This is not the first time that technological innovation has attempted to be applied to the manufacturing eco-system. Currently, anti-counterfeiting technology has been mostly exclusive to QR and Barcodes, which have become mostly obsolete in its safeguards to counterfeiting and pirating. The International Chamber of Commerce (ICC) noted the need for progress in this space seeing that counterfeit operations are expected to “drain US $4.2 trillion from the global economy by 2022.”This demonstrates the immense opportunity the Blockchain ledger has to contribute value in the manufacturing sector’s operational capabilities.
VeChain (VEN) is a Chinese firm in the crypto space at the forefront of block chain in the supply chain industry. Its primary aim is to reduce counterfeiting actions by coupling RFID technology linked on luxury goods with an identification (also called HASH) number used to track the product and record all flow of information in an efficient and transparent way. NFC tags can even be utilized instead of RFID chips in order to track temperature for relevant products. All data added is updated chronologically and accessible to multiple participants at the same time, adding additional clarification for where the item in the supply chain operations. These aspects are stored on the decentralized ledger to ensure authenticity of product, efficiency of operational logistics and any other important data that must be communicated between manufacturer, vendor and consumer. VeChain is still a crypto currency as VEN virtual coins are utilized as incentive for individuals called “nodes” who validate the network transactions and maintain the status of the physical goods online.
While not all 90’s tech companies survived the dotcom bubble, the internet isn’t becoming obsolete in our society any time soon; similarly, as Bitcoin might continue to depreciate there is still much uncovered value in other firms in the cryptocurrency space. As Blockchain’s decentralized ledger technology continuously innovates, there is no estimation on how much value it can provide to real-life applications in manufacturing, as well as a plethora of other industries.
Are you bullish or bearish on the crypto space? Comment your opinions on Blockchain and its potential.