Blockchain can be used for business contracts, source of origin/quality verifications, asset allocation, and the general facilitation of B2B transactions of almost any kind.
Blockchain in a NutshellBlockchain is essentially an independent, universal digital ledger for recording various digital event transactions executed by participating parties. Its core technology uses cryptography as well as distributed database architecture and a peer-to-peer protocol to create shared ledgers among different parties. What makes blockchain unique is the absence of a central authority or a third party requirement for overseeing transactions. Sounds like anarchy? In fact, what makes blockchain more secure than traditional systems is the verification each participant needs to provide to the ecosystem, in order for their transaction to be recorded in the ledger.
Beyond CryptocurrenciesThe early days of blockchain technology when its only practical application constituted the workings of cryptocurrencies (Bitcoin, Ethereum and more recently, Ripple) and it was only understood by guys with thick diopters, are long gone. Blockchain technology is taking over the way we store, validate and use data to transact.
Today, decision makers are catching on to the potential of blockchain technology to fundamentally reshape the business-to-business (B2B) space over the next decade and are rushing to make the investments necessary to capitalise on the possibilities. Opening up market systems has been the ultimate no-go in monopoly-driven industries but blockchain is about to change all this, blowing the whistle on commission rates, booking fees, paperwork costs and all sorts of other superfluous charges that third-party intermediaries were able to transfer on to the consumer. Thanks to this trend, a consumer revolution is erupting, most curiously driven by suppliers themselves, which is a testament to how disruptive the new model really is.
Additional Industry Applications
Increasing Productivity in LogisticsIn a perfect example of an environment where blockchain technology can simplify and streamline complex operations, Belgium’s Port of Antwerp authority has recently began a collaboration with startup T-Mining on a pilot project using blockchain technology to make container handling at the port more efficient and secure. By implementing this, the harbor can securely digitise transactions between multiple parties, including terminals, carriers, forwarders, shippers and drivers, without requiring the involvement of any intermediaries.
The daily operations of Antwerp’s port involve 30 or more different participants with an average of 200 interactions among them, just to complete a seemingly simple task like moving a container to a new location. On top of this, many of the transactions are conducted over email, phone or even fax, resulting in paperwork costing nearly half of the entire container transport. Replacing the paper-based system with blockchain and using a distributed ledger model ensures that transactions can proceed only with the agreement of all participating parties, thus reducing the need for superfluous communications or documentation and minimizing the possibility of fraud or unauthorised manipulations.
Disrupting TourismMultinational travel company TUI Group has recently invested ~€1M in blockchain technology and is already in the process of transitioning their hotel systems to their own, in-house blockchain named BedSwap. Still, to CEO Friz Joussen, this is a small price to pay, given the annual savings of approximately €100M the new model is expected to generate.
Joussen predicts blockchain will significantly disrupt the travel industry in the coming years, rendering third-party travel monopoly websites like Expedia, Orbitz or Booking.com, unnecessary. As a decentralised database, updated in real time, blockchain’s distribution technology can wipe out the need for middlemen in the travel industry entirely and make booking travel much more cost-efficient for consumers, and profitable for providers.
Legitimising the Cannabis IndustryAlthough many U.S. States have now legalised marijuana, whether for medicinal or leisure use, the industry still suffers from stigma, associated with less-than-honest providers, trying to capitalise on the trend and make a quick buck.
Paragon Coin CEO Jessica VerSteeg, a long-term supporter of cryptocurrencies, is now venturing into applying the principles of blockchain to legitimise the suppliers of pure-grade cannabis, thus reassuring consumers and changing the reputation of the entire sector for the better. To help solve the industry’s trust issues, Jessica started building a blockchain system that would provide a quality stamp on the chemical attributes of the marijuana products she distributes through the verification of lab results that can’t be tempered with. This would provide her customers with the much needed peace of mind they are seeking from marijuana products, and in turn, let the industry self-regulate by driving unscrupulous providers out.
Want to explore how you can utilise blockchain technology in your business or industry? Get in touch for an obligation-free consultation with our BC experts.
Copywriter: Ina Danova