Blockchain – what is it? The “b4p trends” study conducted by the Gesellschaft für integrated Kommunikationsforschung (GfK) in August 2018 examined which technology topics have reached the general public and showed that the majority, 82 percent of respondents, have no idea about Blockchain – even more : You have no idea what the term stands for. The technology is slowly being used more and more in practice and there are already first direct contacts with the normal consumer.
Everyone talks about Blockchain – but nobody knows what it is
Without a definition, it will soon be over: “Blockchain” means a decentralized database with a permanently growing list of transaction records. The database is extended in chronological order, like a chain, which at the end is constantly adding new elements (hence the term “blockchain” = “block chain”).
If one block is complete, the next one is generated, with each block containing a checksum of the previous block. All later transactions build on previous transactions and confirm them as correct. Content manipulation or removal of previous transactions is impossible without destroying all subsequent transactions as well.
What exactly is documented is insignificant, with blockchain often being called Bitcoin, especially in conjunction with the cryptocurrency: it has developed the technical model as a web-based, decentralized, public accounting system for all Bitcoin transactions that have ever been made.
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Blockchain digitizes the logistics
The IT group IBMwas one of the first to work to unlock the value of Blockchain for logistics. In Dubai, IBM was already part of a blockchain initiative for import and export processes in 2017, through which everyone involved was able to obtain information about the delivery status and condition of the goods at any time.
This is particularly interesting for perishable goods, for example, to be able to continuously track temperatures during transport. In addition, IBM is working with Blockchain to reduce the administrative burden in logistics by replacing freight and delivery papers with so-called smart contracts.
One of the results of this work is called “Tradelens” and was launched in the summer of 2018 by IBM together with the Maersk shipping company. The information platform for global commerce is based on blockchain technology and bundles shipping data, documents, customs declarations and Internet of Things data.
Shippers, shipping companies, freight forwarders, port operators as well as domestic and customs authorities can access this information in real time, thus working together efficiently and, above all, safely. In addition, IoT and sensor data are useful, for example for temperature control or container weight.
Blockchain for more food safety
The latter example makes it clear how important Blockchain can be – or must be – in the food trade. Most supply chains, ie the path of the fresh product from the producer to the store, are still stuck in manual processes. Therefore, it is difficult to impossible to locate and eliminate triggers for problems (such as contamination with E.Coli).
US retail giant Walmart has been working with IBM for more than a year on a food safety solution and is now using the one developed for this use caseFood Trust Solution – and demands this from its suppliers as well: Instead of entering everything in Excel spreadsheets on paper, all Walmart suppliers of fruit and vegetables will have to relocate their processes to the blockchain by September 2019 at the latest.
The result sounds tempting: before the process was moved to Blockchain, it took a loud Techcrunch an average of seven days to track the food source. Thanks to Blockchain, this period was reduced to 2.2 seconds. This significantly reduces the likelihood of infected foods reaching the end user.
E-voting and digital ID
E-voting is already being tested in various Swiss cantons, but the city of Zug is the only one in which the process of voting does not take place via a central server, but via a blockchain on many computers.
The e-voting complements the already introduced blockchain-based E-ID, which has a few hundred of Zug’s 30,000 inhabitants. A test vote in July 2018 was part of a pilot project with which the city wanted to check safety-relevant aspects – for example, privacy protection, voting secrecy and immutability of the vote.
However, the voting is not all that should be handled by blockchain in the future: The use of urban bicycles, a digital park management or the loan of books without a library card should be possible for holders of a digital ID. Incidentally, Zug made a name for itself in 2016 when it was the first city in the world to accept bitcoins as payment for municipal services.
The Commercial Registry Office of the Canton of Zug has also been able to pay with bitcoins since November 2017. However, e-voting and new payment options have not been widely used and a financial gain with the cryptocurrency can not be booked because the city automatically converts bitcoins into Swiss francs.
Blockchain for bank data and digital ID
Examples of blockchain usage with direct customer contact are surprisingly many internationally. In September 2018, PKO Bank Polski implemented a blockchain platform that aims to provide five million clients with block-issued documents.
The project was announced in March after almost a year of testing and is now being extended to nearly half of the customers who have opted for the new form of information transfer.
The Netherlands is also on the way to becoming a blockchain nation: The Dutch government has initiated more than 25 blockchain trials; Banks, energy companies, pension funds and the Port of Rotterdam are testing the technology.
In addition, the Dutch digital security company Gemalto announced the launch of a blockchain platform designed to help users prove their identity in accessing digital services, such as online banking, online commerce and government websites.
The network includes an ID Wallet in the form of a mobile application. Customers can use this wallet to add personal information to their digital ID and decide whether to share with selected digital service providers.
Blockchain is still in its infancy
Just before the start is the nationwide test of the license driving digitization program in Australia on blockchain basis. 140,000 license holders will be able to identify themselves with a mobile app starting in November 2018, before digitization will be officially launched in 2019.
An Australian federal agency is currently working with IBM to develop a national blockchain that enables businesses to conduct smart-contract-based transactions.
All these examples are forward-looking, but also make it clear: Blockchain is still in its infancy and must first prove its worth in practice. The technology is used primarily to increase efficiency and reduce costs – it is still a long way from blockchain management, where subscribers can perform transactions directly with each other, visible to all who can not be changed in retrospect.
Companies will have to rethink, because Blockchain will force them to cooperate with other companies – at the latest when not more tests, but actual applications are running. Blockchain offers the opportunity to create business ecosystems in which competitors work together to maximize profit and efficiency.
Creating such a functioning ecosystem is one of the biggest challenges. More information about Blockchain and its applicability in practice is a start – so soon a majority will have an idea of the new technology.
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