Blockchain In The Industry – The Hype Has Its Reasons

From time to time, technology becomes hype that makes it difficult to grasp its true potential. The blockchain, which is based on the basic architecture of the cryptocurrency Bitcoin, is such a case and is currently hotly debated in industry circles.

A blockchain is a decentralized register containing a continuously growing list of entries and is protected against forgery and subsequent processing. It has already proven to be a technical solution in recording peer-to-peer payments with digital currencies.

But the potential of blockchain technology is not only limited to the financial sector and should also be taken into account in the industry. For example, the technology could awaken the undreamt-of potential in the supply chain by serving as an unchangeable and reliable logbook for transactions or as warehouse documentation and exchanging it between business partners. Up until now, every delivery – especially international ones – has resulted in a jumble of documentation made up of waybills, invoices, and other authentication documents. What if the material flow, the contracts, and payment processes were stored in the blockchain as soon as a delivery is on its way? All activities and relevant documentation could be viewed in almost real-time by all authorized partners,

Supply chain finance is also an area where blockchain technology could fundamentally change existing business models. Invoice processing could be automated for the parties involved via the blockchain – without the need for third parties such as banks to be involved. In this way, the time required for transactions could be reduced to a few minutes, and the delay between payment processes within the supply chain could be minimized.

Some industrial giants have long recognized the potential of the blockchain for supply chain or logistics applications. For example, IBM and the sea transport giant Maersk are developing a blockchain-based process to coordinate and track the documentation of millions of containers worldwide. An essential step is to digitize the entire supply chain process from start to finish.

The Internet of Things (IoT) is playing an increasingly important role in industry and brings with it new business models. Here, too, the use of blockchain is conceivable to record data from physical objects or services. The promise of non-manipulable data recording simplifies cooperation between OEMs and their customers and reduces costs. Mainly because many manufacturing companies are currently developing servitization strategies, the blockchain offers good advantages. Servitization means changing the previous portfolio – away from pure material goods and towards a combination of product and service. Most strategies are based on a large number of tiny transactions in machine-to-machine communication.

Blockchain technology remains exciting. In theory, we know about its tremendous potential – in practice, we are still at the beginning. So today, nobody can say how and where it will be used in the end. But the strength of the blockchain lies above all in the areas where many partners share data, and all actions have to be logged. The size of ​​the application seems almost unlimited, especially about Industry 4.0 or supply chain management. No wonder industry giants such as Airbus, Daimler, GE, or Siemens employ all teams explicitly concerned with how blockchain technology can be used sensibly and profitably.

The energy industry is one step further: Innogy, a subsidiary of the energy giant RWE, equipped around 1,000 charging stations for electric vehicles with blockchain technology in April 2017 and plans to expand the network further. Carsten Stöcker, the blockchain expert at Innogy, told WirtschaftsWoche that the technology should save third parties between the customer and the charging station. This could increase efficiency since, among other things, time-consuming customer database maintenance could be kept. It would also be conceivable that the vehicles to be charged could in the future carry out the payment process independently at the charging station using blockchain technology and features like smart contracts.

No question about it: the expectations of the blockchain could hardly be higher in the industry – and if you look at the first attempts and considerations, then this technology could be well worth the hype.