How Blockchain Can Reinvent the Global Supply Chain
The technology behind Bitcoin, the most well-known cryptocurrency in the world, was initially discovered in 2008. It remained on the fringes of the mainstream, drawing attention from financial services and startups. It has been receiving a lot more attention recently as blockchain technology companies realize its potential value for other purposes than tracking payments.
A blockchain is simply a distributed ledger that organizes transactions into blocks. Each block is linked to the previous one using complex calculations. Transparency, searchability, and permanent entries make it possible to view all transaction histories. Each update is a "block", which is added to the end of the "chain". This structure makes it difficult to alter records later.
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The ledger allows information and data to be shared among large groups of companies. All members must validate any updates, which is in everyone’s best interest. Much attention and money have been focused on the financial applications of the technology. Global supply chain relationships are a promising example of the technology's potential.
Their complexity and diversity of interests present exactly the kind of challenges that this technology is designed to solve. The blockchain paradigm could be applied to supply chains by simply registering the transfer of goods on the ledger. Transactions would identify the parties, the price, location, quality, and state of the product, and any other information relevant to managing the supply chain. It would be nearly impossible to hack the ledger because it is cryptography-based.