Power of blockchain
August 1, 2018 By Jennifer Rideout
A recent survey by Accenture finds approximately 86 per cent of all aerospace executives expect to employ blockchain technology in the next two years. This technology, coupled with drivers like artificial intelligence, are affecting industries with complex supply chains and significant aftermarkets, including both the fixed- and rotary-wing sectors.
Among numerous advantages, it can provide even the smallest aircraft operators with tools for managing critical areas like parts, pilot certifications and aircraft maintenance.
Don and Alex Tapscott, authors of Blockchain Revolution (2016), explain: “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” It’s an accurate definition, but not necessarily one that is easily understood.
A blockchain is a continuously growing list of records or transactions between peers who are linked together sequentially in ‘blocks.’ Each block in the link (or chain) contains a cryptographic hash for the previous block, a timestamp and transaction data. Blocks include a record of every transaction that occurred on the network during that period, and every transaction is validated to guarantee accuracy. Blockchain data is secured using cryptography. It is also stored across the blockchain network in a decentralized system, meaning that every node on the network stores the entire chain. This means the data being recorded is transparent to all nodes on the chain – albeit encrypted so only the persons involved in a given transaction can access their digital assets. What makes blockchain technology appealing is that it guarantees trust in peer-to-peer transactions, limiting the need for intermediaries like banks, car dealerships or retailers.
Consider that provider Ethereum has 25,000 nodes across the world on its network. In order for a hacker to steal or modify data on the chain, they would need to find a way to do so on every node at the same time. They would then need to repeat this for every subsequent block in the chain, forever. Data contained within a blockchain, therefore, is considered incorruptible. Put another way, let’s say you created a blockchain network (or leveraged an existing one) to track products across your supply chain. Because of the incorruptible nature of the data being recorded, it can be trusted – you would never need to worry that shipment times, environmental conditions, or a slew of other recordable data points were modified or inaccurate.
Furthermore, smart contracts are possible with blockchain technology, which can automate actions and transactions between parties. For example, a smart contract can be created that only allows payment, or acceptance of delivery, if products are kept at a certain temperature during travel, which can be tracked with sensors. Blockchain in the real estate industry can record, track and transfer land titles, property deeds and more, and ensure every document is accurate. The technology is gaining ground in virtually every sector, because the possibilities are nearly endless. Blockchain technology could mean healthcare providers finally have a way to share data across hospitals, doctors, patients and other parties without compromising data security or integrity. For retailers, blockchain can provide an irrefutable product history that verifies where, when, how and by whom their products were made.
In the near term, the biggest impact of blockchain for manufacturers is in the supply chain. I’ve provided some examples already, but the data accuracy and automation that smart contracts offer make it ideal for use across production and distribution. The ability, for example, to guarantee product quality can improve brand loyalty and make manufacturers more desirable. Blockchain also goes hand-in-hand with another network-based technology – the Industrial Internet of Things (IIoT). Manufacturers should know that the more data being captured across their supply chain, the better results they will receive from blockchain technology. For example, the smart contract scenario outlined above is only possible if environmental sensors are deployed in delivery trucks and send data to the network.
Like other technologies before, we are still discovering how blockchain will impact industries, but, as its use expands, it will become difficult for organizations to ignore.
Jennifer Rideout is the manufacturing marketing manager for Cisco Canada. She is responsible for developing go-to-market strategies for the manufacturing sector in Canada, including channel alignment and content development. She can be contacted at email@example.com.