4 innovative uses of blockchain in the enterprise
Blockchain, the technology behind Bitcoin, is best known in the financial industry. But experts say the technology has potential for a wide range of uses in the enterprise.
Blockchain helps guarantee information has a timestamp whenever any change happens, ensuring data can be trusted in real time. While Blockchain and distributed ledger technology (DLT) are now generally better understood than they were in the past, there is still some confusion about the technology and exactly how businesses can use it.
According to Alex-Paul Manders, Technology Business Management practice lead at Information Services Group, there are four main applications of blockchain/DLT:
- Cryptocurrencies such as Bitcoin or Ripple
- Start-up fundraising, also known as Initial Coin Offerings or ICOs, similar to an IPO
- Blockchains with specific purposes, like Ethereum for smart contracting mechanisms or Sia Distributed Cloud Storage
- Enterprise and consumer applications, also known as Dapps, which are built on blockchains for specific purposes.
A number of companies are currently testing — or figuring out how to test — potential applications in consumer and enterprise applications. The following are four innovative use cases notable for their potential to spark additional applications of blockchain in the future.
1. Taking humans out of the manufacturing supply chain
Cisco is currently exploring how DLT could be used to audit supplier transactions across its entire subsidiary base.
The vision is to eventually enable "machine to machine" communications via IoT to reduce supply chain complexities by integrating smart-contracting software mechanisms directly into routers and switches.
2. Improving the retail supply chain
China consumes an estimated 52 million pounds of pork each year, and Walmart is a leading supplier. But when pork goes bad, as it occasionally does, the whole pork supply in an area is often tossed, a solution that's incredibly wasteful and expensive.
Walmart wants to track pork movement within the supply chain using DLT, and is currently testing the technology. In doing so, Walmart will be able to target recalls and reduce food waste. It will also bring transparency to retailers, suppliers and farmers in terms of various transactions, including shipping lots, payment terms, critical dates, locations, etc.
"At the end of the day it reduces intermediaries in the supply chain, which increases your margins," said Manders.
Given the growing competition between Amazon and Walmart, Manders predicts Amazon will soon begin using blockchain technology in a similar manner to track food and other products.
3. Preventing counterfeit products
Microsoft's blockchain supply chain group, Project Manifest, is testing the ability to track inventory on cargo ships, trains and trucks using RFID tags that link back to blockchain technologies.
Though Microsoft hasn't shared many details about the project yet, it appears it is working with partners to track things like auto parts to address cross-industry supply chains, which are very complex.
Blockchain smart-contracts are being used to address everything from the shipment, to receipt of inventory between all parties in various supply chains. Doing so could reduce complexity and the number of counterfeit items that enter the supply chain.
4. Changing how energy is sourced and used
Another potential application of blockchain is for settlement of clean energy contracts in electrical grids, within the context of future state decentralized energy grids, according to Manders.
"When we begin to think about smart cities, we think about how energy is transferred between different objects, such as self-driving cars, buildings and even vending machines," said Manders. "Blockchain will allow for the scalability within a decentralized ledger to enable various consumers of energy to trade, or dictate where energy they wish to consume is coming from."
While Daaps hold the most potential in the enterprise, it's likely many innovative applications that touch on the first bucket: cryptocurrencies such as Bitcoin or Ripple, will also emerge.
Dubbed an "AirBnB for EVs," the application will allow EV owners to rent out their charging stations, set their own prices and receive payments via Bitcoin. The effort aims to prove how blockchain technology can make sharing and payment easier and more efficient while decreasing the "range anxiety" current and prospective EV drivers experience, which experts say is critical to expanding the use of electric vehicles.
The companies say the partnership marks the first peer to peer charging network to use blockchain technology in North America.
"P2P charging opens the opportunity to break free of infrastructure limitations and gasoline oligopolies to access electricity for cars," says Dietrich Sümmerman of Share&Charge. "By establishing networks of individuals willing to share their EV charging stations, we are opening up more charging options to EV drivers, while at the same time ensuring station owners are compensated accordingly."
The new P2P network will be available in California starting in August with plans for expansion in other states.