Blockchain, the next Supply Chain Transparency

Chances are, even if you don’t know what “a digital distributed ledger of transactions” is, or unfamiliar with the name Satoshi Nakamoto, you probably will be learning about Blockchain pretty soon, anyways. According to the zero marginal cost professor, the IoT is the optimization and amalgamation of communications, logistics and the energy grid. While uberisation takes care of the front desk matching service seekers to potential operators, the same efficiency is lacking at the back office.

What is Blockchain, anyways?: “a distributed ledger”, “a digital database”, “a Bitcoin tech”, “another cloud computing feature”, and etc. The original intention behind an unexpected innovation was to invent a digital currency that cannot be manipulated through monetary policy by the powers that be.

Optimization : Since Blockchain is composed with such a special data structure, committed transactions are extremely hard to manipulate or remove regardless of how many were made and recorded how long ago. Transactions are logged with a timestamp and the user ID that submitted the record, along with profile information, and stays there forever. That means no action can be taken against the database without leaving a trace behind. Bitcoin’s worldwide acceptance and usage as a currency shouts all the bells and whistles of maximum data integrity and security level anyone can hope for. As a matter of fact, Bitcoin’s creation centered around making a data structure that cannot be manipulated by the powers that be. The founders have stated that Bitcoin has a superior data integrity than the rest of the non-digital legacy currencies. It is recognized by the U.S. Treasury as a “decentralized virtual currency” based on its peer-to-peer and open source qualities. A peer-to-peer quality sees transactions take place directly between users in the open without single authority overlooking the database with superior privileges above others. There is no single organization or authorized user ID that owns the ledger and therefore able to alter the data without given consent from pertinent parties, as is usually the case with legacy closed database systems where the big boss walks in on strange hours and takes matters into her own hands. No action can be taken against the database that doesn’t make logical sense in the premise of existing data.

Data Transparency : Being implemented as an open source code means central audit can view program codes to ascertain how that system operates at any given time. Not only will it fractionalise auditors’ work, it also means that all pertinent (pre-verified and approved) parties with access to the transaction will be able to see what happened where and who did it, that is, if a transaction took place against their will which is Blockchained-ly impossible to begin with.

Data Security : Every party tapped into the system leaves a trace, and that’s great for auditing. Before a transaction can be made, Blockchain verifies that the version to be used is in sync with all other versions on the network, verifies discrepancies and automates approval requests from all users before proceeding.

Supply chain: With Blockchain capability, businesses can track movements of assets/products in supply chains over a host of geographical areas concurrently. For example, a typical clearing house has a good chance of suppliers delaying or canceling deliveries, ergo, putting timelines for the entire itinerary on the line. Blockchain can observe operational glitches as it happens and coordinated solutions with suppliers and strategic partners in a cross-organisational manner, on the spot, and in an automated fashion. Blockchain application is most beneficial in optimizing transaction verification across enterprises by by-passing holdups at each administrative processing stage, both internal and external, throughout the entire length of the long and tedious supply chain. It’s a resolution to a multitude of unnecessary costs, human limitations or simply negligence over simple standard operating procedures. 

In the age of IoT where household individuals operate on uberised platforms and shape minimal-marginal costs communities in the process, one thing is clear. Organizations that are able to trim down to a lean, clean and green and optimize enormously expensive big bungling buros, from communities all the way up to regional states and government, will have the best chance of thriving into the second quarter of the 21st century. That, or play catch up with competitors with optimized front and backoffices.

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