Blockchain is the new black
Blockchain will change the rules for middle market companies.
Perhaps one of the most significant developments affecting the future of the internet is blockchain technology.
A number of major companies have launched blockchain (also called distributed ledger) initiatives to track shipments of cargo from manufacturer to distributor to retailer, trace food products to their source in times of contamination, and create smart contracts that execute provisions automatically using workflow and scanning technology.
“Right now, companies should be analyzing how blockchain could disrupt their businesses, and begin planning counterstrategies and explore new opportunities,” says Jay Schulman, a principal in the security, privacy and risk consulting practice at RSM US.
As noted at the 2017 World Economic Forum, innovators are programming blockchain’s digital ledger to “record anything of value to humankind—birth and death certificates, marriage licenses, deeds and titles of ownership, rights to intellectual property, educational degrees, financial accounts, medical history, insurance claims, citizenship and voting privileges, location of portable assets, provenance of food and diamonds, job recommendations and performance ratings, charitable donations tied to specific outcomes, employment contracts, managerial decision rights.” In other words, anything that can be expressed in code.
Cook County, Illinois, for example, launched a pilot program using blockchain to track and transfer real estate property titles and other public records with greater security than existing methods can afford. Real estate transaction data, usually available through the multiple listing service, is often decentralized, fragmented, out of date and difficult to access. But blockchain can overcome such barriers by providing a shared database with up-to-date information. The technology can streamline transactions by providing a secure environment that cuts out the middleman.
There are a number of compelling cases that could be made for using blockchain technology in the automotive sector. Since it implements a transactional ledger, for example, blockchain could be useful for tracking parts. As a part moves through the manufacturing ecosystem, a record could be created of the specific car in which it was installed. That part can then be tracked as it is removed from one car and inserted in another in the aftermarket. At any time, a manufacturer, service center or car dealer can track every part in a car.
Similarly, blockchain can offer consumers transparency into the food they buy. The technology, which is being tested by Walmart, Kroger and Amazon Whole Foods, allows consumers to see, for instance, how livestock was raised or when plants were harvested. Producers such as Nestle, Tyson Foods, McCormick and Dole are testing the technology with their supply chains to reduce costs associated with spoilage and product recalls.
Like any new technology, there is a level of concern about the security of these platforms, but the developers are working alongside the public sector to address these issues. “Blockchain is changing the rules of the game,” notes Schulman. “Middle market companies need to learn those rules and make them work to their advantage.”
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