What is Blockchain?
Blockchain – is a type of database. A database is a set of information stored on an electronic computer system. Information in databases is stored in a table format with the idea of simplifying the search and filtration of specific information. According to Investopedia, one key difference between a typical database and a blockchain is the way the data is structured.
Blockchain technology – is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks are secured and bound to each other with cryptographic chains.
What is the most popular use of the blockchain industry?
I can bet that the first time you heard the term “blockchain” was in the context of a cryptocurrency. Yes, cryptocurrencies are indeed the most famous area where blockchain is applicable. Moreover, they are inseparable. Every cryptocurrency works on the blockchain.
How it works and how are cryptocurrencies and blockchain-related?
Blockchain is a special technology that is used to record information in the form of blocks of data. Cryptocurrency is one of the most popular ways to use blockchain technology.
In turn, Bitcoin is the first and most popular example of a cryptocurrency, but not the only one. BTC (Bitcoin) – is a cryptocurrency asset, which is working on its own Bitcoin blockchain. All the operations with BTC’s are tracked in Bitcoin blockchain. The number of BTC’s issued are also controlled by the Bitcoin blockchain.
Generally, there are over 300 different cryptocurrencies. The most popular are Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and Litecoin (LTC).
Thus, by saying that blockchain and cryptocurrencies are inseparable, it means that absolutely all cryptocurrencies work on the blockchain. Cryptocurrencies are virtual, not physical money, thus you cannot touch them or hold them in your hands.
BUT! It’s important to note that blockchain technology allows you to exchange ordinary “paper” money for crypto. For example, exchange Litecoin to USD – in other words, make purchases of Litecoins for US dollars.
Other areas where blockchain technologies are applicable:
As it is already clear from the description, the fact that blockchain is applicable only for cryptocurrencies is a myth. Yes, this is the most common use of this technology, but blockchain is also used in medicine, gambling, data structuring, delivery, voting, data management, authentication, authorship and ownership, charity, fintech, marketing, internet of things and many others, investing and so on. This technology is rapidly gaining popularity today.
The history of logistics:
In the past, supply chains looked very different – they were as simple as possible. The first delivery trade was conducted only for the surrounding areas. Over time, there was a transition to rail, then road and, finally, air logistics.
Today, medicines, food, clothing, equipment and even cars can be delivered all over the world. Mobility and computerization of delivery allow everyone to get the item you need from anywhere in the world. The accuracy of blockchain technology drops the chance of error or failure by almost 100%.
Blockchain in logistics: what modern problems does this solution solve?
A modern supply chain can consist of many stages, sometimes they can even be scattered all over the world (for example, factories in different countries, offices of enterprises, warehouses, etc.). The process can involve a lot of people who have to work with tons of documents, agreements, and processes, and the logistics sometimes drag on for days, weeks and months.
Also, important is the fact that this order of things greatly increases the possibility of human error. Moreover, one cannot deny the possibility of bad faith of one or more participants in the process, mechanical errors, delays and other nuances.
This can be considered a signal that blockchain can be very useful in logistics to simplify transportation management and even increase the speed of this process.
The main point of using blockchain in logistics is a significantly higher level of transparency and security, discarding the chance of possible discrepancies in the documentation, etc.
All data exchange is recorded in blocks, without the ability to delete or change the recorded information.
Today, the use of blockchain in logistics is a common thing not only for small companies, now large corporations, including world leaders, are switching to new technologies not to stay out of the board.
For example, in the food industry, it is extremely important to accurately track each product. Walmart, the world’s largest wholesale and retail chain, uses blockchain to track shipments of pork from China. The blockchain helps to track literally every piece of meat: where it was received and processed, in which warehouse it is stored and what is the shelf life. Similarly, blockchain is used, in particular, in Nestle and Unilever.
The world’s largest mining company BHP Billiton uses blockchain to record mining data from suppliers. This not only increases the efficiency of work within the company but also improves communication with partners.
Finally, the international diamond mining corporation De Beers uses blockchain to track gems from mining to sale. In this way, the company avoids the problem of blood diamonds and guarantees customers that they are buying genuine jewelry.
Moreover, small logistics providers appear on the market, helping large companies to switch to blockchain for the better and more transparent supply chain management. The most famous example is Cloud Logistics.
Conclusion
Logistics is one of the biggest challenges for the current generation of companies around the world. The key problems that the logistics industry is currently facing are at least partially solved by using blockchain technologies.
Blockchain is a linear chain of many blocks that are interconnected and protected by cryptographic evidence. This technology can be applied in a variety of activities other than financial transactions. Blockchain use cases in logistics include inventory tracking, increasing transparency, dispute resolution, invoicing, payment, and more. There are different scenarios for using blockchain in logistics for different needs of companies.
What do you think, can blockchain really revolutionize the logistics industry?
