Blockchain concepts for supply chains

While the Ethereum saga slowly turns from comedy to tragedy, serious folks are exploring some very promising uses for blockchain technology, including “supply chains” or “logistics”.

Blockchain is interesting for these applications for several reasons. For one thing, “supply chains” benefit from readily accessible and verifiable provenance, and a blockchain can supply and open and standard way to exchange this information. Mahindra and IBM seem to be interested in this use, so that “traceability becomes much easier”, in complicated, multivendor projects.

Blockchain technology may also be useful for financial aspects of this activity. The Delft University project describes thee use cases, “chain financing, supply financing and circular economics”, which I’m sure I don’t really understand. But again, a blockchain may offer an open and standard way to handle these transactions among diverse parties.

I think that the cryptographic signatures and tamper proof records on the blockchain would be pretty useful, though you don’t actually need to use a blockchain per se to accrue the benefits of these technologies. On the other hand, blockchain may be an easy way for multiple independent parties to standardize without requiring painful coordination among disparate vendors.

Unlike the rather frivolous excitement about “disrupting money”, and the absolutely silly fixation on exchange rates (“Bitcoin tests highs for the year”), these use cases are “vegetables”: boring but critical economic infrastructure. Even better, they are socially positive as well as profitable: traceability and efficient supply chains should reduce waste of many kinds (including corruption), and, as far as I can see, don’t threaten workers, families, or civil life.


Cryptocurrency Thursday

5 thoughts on “Blockchain concepts for supply chains”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.