Trezor, the manufacturer of crypto hardware wallets, has announced that it will take control of its wallet chip production process by producing its own silicon chips. The company states that the newly designed “chip wrapper” will enhance device security and considerably shorten lead times for mass production. Trezor ‘Unpacks Process’ and Produces Its Own Silicon […]
- Supply Chain
9 promising blockchain use cases in healthcare industry
Blockchain enables healthcare record management, clinical trial transparency, efficient supply chain management and more.
The use of blockchain technology in the healthcare industry has the potential to revolutionize the way medical records are managed, medical research is conducted and patient care is delivered. Here are nine promising use cases for blockchain in healthcare.
Medical record management
Medical records can be safely stored and managed using blockchain, improving accessibility for patients and healthcare professionals. Patients’ ability to control access to their medical records enhances security and privacy. One example is MedRec, a blockchain-based system for managing medical information created by MIT researchers.
MIT Professor Andrew Lippman says the goal of the MedRec project is to be like a Swiss bank for health records, but without the bank. #Bizofblockchain— MIT Technology Review (@techreview) April 23, 2018
By offering a transparent and immutable trial data record, blockchain can increase clinical trials’ transparency and integrity. The Clinical Trials Reporting and Results (CTRR) platform is one example of a platform using blockchain to store clinical trial data.
The CTRR platform is a blockchain-based platform developed by the pharmaceutical company Pfizer in collaboration with other companies, including IBM. The use of blockchain makes it easier for researchers and regulators to access and verify trial data, improving the quality and reliability of clinical trial results.
Prescription drug traceability
Blockchain technology can trace prescription medications from the point of manufacture to the final customer, lowering the chance that fake medicines will enter the supply chain. An example is a blockchain-based network called MediLedger, which tracks the flow of prescription medications.
Supply chain management
Blockchain adoption can increase the efficiency and transparency of supply chain management in the healthcare sector, making it more straightforward to follow the flow of medical supplies and equipment. A blockchain-based supply chain management system utilized in the pharmaceutical industry is VeChain, for example.
San Marino has approved VeChain’s Digital Covid Certificate, which records pandemic related medical history on the blockchain and is reportedly verifiable worldwide. https://t.co/lGuqKfajQ8— Cointelegraph (@Cointelegraph) July 2, 2021
Medical device management
Blockchain technology can safely manage medical device data, including usage statistics and upkeep logs, enhancing patient safety and lowering the likelihood of faults. For example, Chronicled is a platform for managing medical devices based on the blockchain.
Telemedicine data, including video consultations and electronic prescriptions, can be safely stored and shared via blockchain, enhancing patient access to care. An example of this use case is the blockchain-based telemedicine platform Solve.Care.
Solve.Care has also established specialized Web3 courses for South Koreans in collaboration with Inha University. After completing the program, students will have the skills to redesign, redefine and improve next-generation Web3 digital health networks. Classes will begin in March 2023.
Together with Inha University, we have launched an educational program that offers #Web3 courses to their students. We’re empowering future Korean leaders to reimagine, redefine, and enhance their already excellent #healthcare system.https://t.co/6kTqfE5IrO$solve #blockchain pic.twitter.com/BpFyqlbBkX— Solve.Care (@Solve_Care) February 14, 2023
With blockchain, drug development can be more transparent and efficient, enabling researchers to share information and work together more successfully. The Clinical Research Blockchain platform is one example of a blockchain-based system for storing and exchanging clinical research data.
Genomic data may be safely stored and shared using blockchain, enabling more individualized and efficient medical treatments. Shivom, a platform for exchanging and interpreting genetic data, is an example.
Blockchain can be applied to the processing of health insurance claims to increase transparency, efficiency and speed while decreasing fraud. For instance, MetLife is using blockchain to streamline the life insurance claims process, reducing the time required to process claims and improving the overall customer experience.
The road ahead
Blockchain can completely change the healthcare sector from medical record management to drug discovery and health insurance. Even though these use cases are still in the early stages of research, they have the potential to boost healthcare delivery effectiveness and improve patient outcomes.
Related: What is blockchain interoperability: A beginner’s guide to cross-chain technology
However, before blockchain can be widely used in healthcare, numerous issues still need to be resolved, including standardization, regulatory and legal impediments, and interoperability with current systems.
What are the applications of NFTs in supply chains?
PFP NFTs have seen a lot of adoption over the years. Can NFTs be valuable in real-world scenarios and address pain points with supply chains?
What are the real-world challenges of implementing NFTs at scale across supply chains?
Technology is often only a means to an end and is seldom a silver bullet. There are several real-world issues that can hinder progress with rolling out NFTs and blockchains across supply chains globally.
The benefits of digital twins for real-world goods can’t be underestimated. However, today’s supply chains globally are extremely intermediated and run on trust. A farmer in Africa sells their produce to an intermediary as they have for years. This develops a certain amount of trust between the two parties.
As a result, resistance to change would be high, even when the farmer realizes that they will accrue value better in a more transparent supply chain. On the other hand, the intermediary wouldn’t want a new system, as their livelihood relies on the margins they make using the farmers’ produce.
Consequently, supply chains are susceptible to resistance from various stakeholders to such implementation. Drug supply chains could become extremely efficient with nonfungible tokens and blockchains. Yet the industry thrives in countries such as India and Nigeria, and corrupt stakeholders across the supply chain would be opposed if a new system is proposed.
Therefore, any technology being introduced into these supply chains will need to have both a top-down approach and a bottom-up approach. The top-down approach will involve governments and regulators mandating better traceability; the bottom-up approach would be firms solving this issue by working on the ground with stakeholders and spreading awareness of the benefits of the technology.
Which companies are using blockchain for supply chain management?
Several luxury and logistics brands use blockchain technology and NFTs to track their products and create digital twins that can help with community-building initiatives.
Major marquee brands in the auto, luxury and retail industries have already started integrating NFTs into their supply chain to obtain the innumerable benefits they offer.
Walmart utilizes digital twin technology to track the food supply chain ecosystem, increasing trust. Automobile giant Ford uses digital ledger technology to ensure it gets ethical minerals for production.
The diamond behemoth De Beers also uses blockchain to validate whether diamonds are sourced from war-free zones. Along with this, transportation companies such as FedEx and Maersk use this technology for their operations.
Luxury brands such as DeBeers, Louis Vuitton, Dolce and Gabbana, and Gucci have turned to NFTs for customer integration and loyalty. As nonfungible tokens act as digital twins of real-world goods, they not only offer transparent supply chains but also greater community retention through customer experience.
What are the advantages of using NFTs in the supply chain from a customer perspective?
Customers can see where products come from and the various routes they take before arriving at supermarkets.
Last but not the least, the end-consumer will get access to the evolution of a product. They have transparency on where the raw materials were produced and the companies that were involved in the production. This offers another dimension from a customer experience perspective bringing creators of products closer to the end-user.
In the FMCG, pharmaceuticals and sectors where expiry and counterfeiting are a major hassle and could potentially lead to catastrophic consequences, NFTs can be a lifesaver. Along with that, the trust factor in brands also increases among customers. Apart from the primary benefits, NFTs can help make supply chains more sustainable, which in turn can help the environmental, social and governance (ESG) narrative of businesses.
As nation-states, central banks and the markets demand more sustainable practices from global businesses, ensuring a transparent and efficient supply chain can help firms with their ESG narrative. Should a company wish to weave sustainable practices into its supply chain, carbon efficiencies achieved through the use of NFTs could be a great value add. For the new age-conscious consumer, this means sustainable products, and for the globe, it means lower emissions.
What role do NFTs play in the supply chains?
Real-time tracking, settlement and documentation of the supply chain cannot only create more efficiencies for businesses but also help with better financial products that they can rely on for their operating capital.
NFTs create a digital record that is immutable and transparent. What this offers the supply chain industry is a transparent trail where everyone in the ecosystem would have complete visibility. Therefore, right from producing the raw material for goods to displaying them on a website or brick-and-mortar shop, the usage of NFTs will provide traceability and help in supply chain management.
Phygital NFTs have proven to be a great utility when they are tagged to real-world goods. Using NFTs for tracing a good or a manufactured product right to its source can add credibility to the product. It can also offer consumers a method to understand the source of the product they are looking at and choose one based on the providence of the product.
Apart from traceability, NFT-gated procurement and NFT-gated warehousing will help data scientists with valuable insights into product journeys at an individual level. Such granular data will help analysts, business owners and investors assess inefficiencies in the supply chain. This will help set new service level agreements (SLAs) with service providers on the supply chain and monitor them to hit these SLAs.
Furthermore, weaving NFTs and digital twin technology into the supply chain will enable companies to automate payments through the system and perform instant settlement once goods are delivered. Multiple checks and balances before transferring payment for finance teams would be a thing of the past once real-time traceability is enabled.
Real-time tracking will also help financing products like trade finance, where the status of goods can be used to borrow working capital by stakeholders on the supply chain. Supply chain managers who have an enhanced vantage point can intervene at the right checkpoint in the event of congestion or bottlenecks. This makes supply chains more efficient, resulting in better revenues and lower costs.
Why should businesses adopt nonfungible tokens in their supply chains?
NFTs can be used in supply chains to make them more transparent and efficient, leading to several billion dollars being saved. This is yet another space where Web3 technologies can have real-world applications.
The supply chain is an integral part of any business. Right from pharmaceutical giants and fast-moving consumer goods (FMCG) behemoths to local direct-to-customer brands, most businesses are dependent on efficient and resilient supply chains to deliver their products and services effectively. Despite being a vital cog in the wheel for organizations, supply chain networks are far from efficient on a global scale.
One of the key applications of blockchain technology has been traceability in a supply chain. This feature of the technology has been experimented with in trade finance use cases by banks such as HSBC. This is a use case that relies more on smart contracts and blockchain infrastructure layers like the Ethereum and Solana blockchains.
While nonfungible tokens (NFTs) as a technology paradigm were not necessarily planned to disrupt supply chains, they can bring about a massive transformation of pain points in this space. NFTs can act as “digital twins” of real-world goods and can help traceability within supply chains.
Here are a few numbers, statistics and narratives to put things into perspective.
- 49% of businesses have zero knowledge of what’s happening at key touchpoints in their supply chain due to a lack of visibility.
- Counterfeiting goods cost global brands more than $232 billion in 2018.
- In industries such as pharmaceuticals, the counterfeit market alone could be close to $200 billion per year.
The scale of the problem can be understood from the numbers above, and NFTs can offer solutions to these inefficiencies. Adding to this, there are also other interesting use cases that lie at the convergence of blockchain and supply chain, which is discussed later in this article.
BMW taps Coinweb and BNB chain for blockchain loyalty program
BMW will integrate decentralized tech in two phases- first in its daily operations to eliminate complex paperwork, and the second phase would see the development of a customer loyalty program.
German car manufacturer BMW plans to integrate blockchain technology into its daily operations and create a blockchain loyalty program for its customers in Thailand. The popular carmaker has onboarded blockchain infrastructure firm Coinweb as its decentralized architecture provider and BNB Chain for settling transactions.
The integration of blockchain technology into BMW’s workflow will take place in two phases. First, the decentralized tech will be integrated into BMW’s daily operations with the goal of automating time-consuming manual processes and streamlining the company’s automobile financing services.
The second phase of the project would see Coinweb develop a customized Web3 application for BMW’s customer loyalty program. The program will use a blockchain-based rewards scheme to incentivize BMW Group customers. A customer’s tier and status in the ecosystem will be determined by the loyalty rewards they have acquired via various actions.
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Owners will be able to use their rewards to purchase goods and services from BMW as well as from a linked ecosystem in the future. Binance’s native BNB chain will be used to settle transactions.
Talking about how customers will be rewarded under the upcoming loyalty program, Coinweb CEO Toby Gilbert, told Cointelegraph that customers will be rewarded every time they have touchpoints with the BMW ecosystem, be it “buying a new car or they go for a service,” he explained further:
“Customers will be rewarded with loyalty points and they will be able to spend within the ecosystem. Our hope is that there will be a future global rollout but currently our partnership is for Thailand.”
BMW Thailand’s leasing head Bjorn Antonsson said that the firm has been actively monitoring the progress of decentralized tech and its various use cases over the years. Antonsson hoped that the integration of blockchain tech in their daily operations would eliminate the manual paperwork and contribute toward the company’s efficiency and transparency.
The interest of automobile manufacturers in decentralized tech is nothing new, and BMW has been involved with the tech since 2018. BMW first used blockchain technology to track its cobalt supply and ensure its products are being supplied using ethical practices. Apart from BMW, another popular German carmaker Mercedes has actively used nonfungible tokens and crypto coins as promotional tools.
Italian carmaker Alfa Romeo used blockchain tech to track car records, while Ferrari’s new deal has hinted at NFT integration as well.
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How smart contracts can improve efficiency in healthcare
From insurance to telehealth, smart contracts are finding use cases across the healthcare industry.
Smart contracts are self-executing lines of code that run atop blockchains and are triggered once a set of predetermined conditions are met. They are used to automate the execution of online agreements without the involvement of third parties. Today, they are used across many industries, including the healthcare industry.
The healthcare sector stands to benefit a lot from the widespread implementation of these self-executing programs, especially when it comes to streamlining arduous manual processes, automating bureaucratic procedures and alleviating issues caused by human error.
Today, many healthcare institutions rely on highly centralized conventional management systems to handle sensitive tasks such as record keeping, transactions and correspondences. While some traditional systems can undertake some of the tasks exceptionally well, many of them are prone to failure due to limited interoperability, susceptibility to data corruption and lack of transparency.
The good news is that smart contracts can solve many of these problems.
How smart contracts work
Smart contracts can be programmed to perform a wide range of tasks. They can, for example, be programmed to record payment information on the blockchain once a transaction is made while ensuring that only entities with permissioned access can view the details.
In the healthcare industry, companies can use smart contracts to send out staff salaries, record patient information and notify insurance companies about pending medical bills.
Smart contract programs are usually deployed in compatible runtime environments. On the Ethereum blockchain, for example, smart contract codes are executed via the Ethereum Virtual Machine, which supports the installation of decentralized applications, including smart contracts.
Smart contracts in medical records
Medical records are an essential part of patient management. Smart contracts can be used to create patient profiles on the blockchain while allowing doctors and relevant medical practitioners to view past medical records. This would allow them to come up with better treatment procedures based on a patient’s past treatment history and subsequent outcomes.
Such a setup would save lives and help doctors avoid issues related to medical negligence. Health centers can also configure smart contracts to track health complications arising from treatment side effects and encode them to share the information with partner drug manufacturing companies and medical associations that have yet to uncover the full side effects of new drugs.
It is additionally possible to have smart contracts that send patient information to insurance companies for the purposes of patient compensation claims to smooth out such processes.
Streamlining billing and collection issues
The lack of effective healthcare billing systems can present many challenges to healthcare institutions, especially when it comes to revenue cycle management. Errors related to billing and collections can hinder optimal service in the event that they cause major interruptions.
Trustless blockchain networks incorporating smart contracts can mitigate many of these challenges by ensuring elaborate checklists are implemented to avoid common errors.
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Such systems would be beneficial in situations where there are preexisting transparency issues. The use of multisignature smart contract fail-safes would ensure consensus within management to avoid related problems.
Additionally, the storage of billing information on the blockchain would help to prevent problems related to data loss due to the immutable nature of decentralized ledger networks.
Speed and privacy
Delayed medical information transfers sometimes lead to poor service. Smart contracts have the ability to change this by disseminating patient information across relevant departments in healthcare institutions. Some smart contract systems are able to generate unique anonymized identifiers that can be used to identify each patient without revealing their identity in order to safeguard their privacy.
Moreover, they can be set up to block unauthorized access and, at the same time, allow the scrutiny of the records by personnel, partners and regulators.
The data can also be used for numerous purposes, including clinical research.
That said, smart contracts that manage confidential patient information sometimes require periodic security audits, which can lead to the exposure of sensitive information.
Smart contracts to counter fake drugs
Hundreds of millions of dollars worth of counterfeit drugs find their way into the healthcare industry every year. The bogus drugs cause pharmacies and hospitals to suffer financial losses and sometimes also lead to the death of victims who take them. The flow of these fake medicines is enabled by dysfunctional supply chain systems that are unable to track the origin of supplied drugs.
Healthcare substitutions can use smart contracts to detect fake drugs by confirming supply chain data provided by manufacturers. The implementation of such systems would allow tracking of the drugs using custody logs as they move through the supply chain.
Because the data is stored on the blockchain, which is transparent, healthcare institutions and their suppliers can easily identify supply chain weaknesses that lead to the entry of fake drugs.
Cointelegraph had the chance to speak with Guy Newing, the founder of Immunify.Life, about this problem. His company specializes in the development of secure, self-sustaining blockchain networks for the healthcare industry. According to the executive, there are many ways of countering the issue, including withholding payments for drugs that are not from legitimate sources.
“For instance, a smart contract can be programmed such that retail drug sellers may need to only pay for items received when certain conditions that would have otherwise been tampered with at any point in the supply chain have not been tampered with. This solidifies the integrity of the drugs and healthcare ecosystem as a whole.”
Alex Pipushev, founder of blockchain services company GTON Capital, said that blockchain supply chain systems were evolving at a fast pace and will most likely cater to a wider range of healthcare services as their utility increases.
“Blockchain is a great tool for verification. The healthcare use case is amazing here because you can technically store stamps for each pill set/box in an encrypted way, and anyone who bought it from a pharmacy can verify if legit or fake medicine was sold,” he said.
Smart contracts in other aspects of health
Remote monitoring devices have revolutionized some aspects of telehealth. Today, wearable devices are able to measure important physiological elements such as a patient’s heart rate and transmit the data in real time to healthcare professionals.
Smart contracts have the capacity to not only store such data on the blockchain but also keep it confidential through encryption while ensuring that only intended recipients are able to access it.
The benefits of smart contracts are also becoming apparent in health insurance due to their ability to improve customer experiences.
For example, claims payments handled by smart contracts are typically processed at a faster rate compared to manual procedures, which can sometimes drag on for weeks.
However, there are some limitations when it comes to the use of these technologies in the sector due to constantly changing pre-contractual disclosure obligations, which require some level of human interaction.
The insurance sector is also a regulated market, so there will always be concerns, particularly regarding consumer outcomes. These challenges are further compounded by decisions made by regulators and underwriters that are, in some cases, of an extra-contractual nature.
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As such, smart contracts are presently being used in the sector for impermanent processes such as the confirmation of payments.
Smart contracts have a lot of use cases in the healthcare industry. However, the sector has been slow to embrace the new technology, which has the potential to transform how the industry works.
That said, the healthcare smart contracts market is growing. It was valued at approximately $1.6 billion in 2021 and is projected to breach the 1.78 billion mark in 2022.
Blockchain-based fintech company prepares to enter $500B freight settlement market
Although rare, real-world blockchain utility does exist, now evidenced by one company’s efforts to reduce transactional fees in supply chains.
The world is quick to blame inflation for the rising prices at grocery stores and retailers. This was the #1 political issue for recent Election Day voters in the United States. For example, media sources recently reported poll data that 85% of Americans could not afford to spend $200 on a Thanksgiving meal in November 2022, and only 25% could afford $100.
However, few recognize inflation is only part of the problem. Higher costs for products and services are also directly attributable to settlement fees paid by transportation providers who are forced to take out the equivalent of payday loans against their freight invoices.
Shipper payment terms in the transportation industry are known to be egregious, and most transportation carriers cannot afford to wait 30–180 days to get paid. When a carrier factors, it pledges the collection rights in its accounts receivable to the bank and, in exchange, the bank advances cash in about 10 business days.
By industry averages, this cost to carriers is 3% of every receivable — often escalating up to a 25% annualized interest rate. The bank then waits the 30–180 days and collects directly from the freight shipper. If inflation is thought of as a silent tax, invoice factoring is a second layer of silent taxes on everything we buy.
More than 1 million U.S. trucking companies are factoring 100% of their invoices, and 50% of third-party logistics companies are too. Due to inflation, larger transportation companies are also losing 3% or more of their invoice values when waiting over 60 days to get paid by shippers. These costs create higher freight rates, and the excesses ultimately trickle down to every household and consumer.
Fixing a broken supply chain by settling on the blockchain
TruckCoinSwap (TCS) is a fintech and freight-tech company utilizing a blockchain-integrated mobile app to provide fast and free freight receivables settlement to transportation companies. Moreover, TCS is listed on CrossTower in the U.S. and abroad in 80 countries, and is now also listed on Uniswap.
Chief technology officer Jake Centner explained:
“Centralized exchanges can work very well, and the team couldn’t be more proud of the relationships TCS has made. However, the TCS token must also have a decentralized exchange and non-custodial option in the ecosystem for transportation companies and holders. Uniswap has been the gold standard in this space.”
To that end, TCS has created a process and platform identical to how carriers are settling now, with one added step. A few days after uploading freight documents into the TCS mobile app, a push notification is sent and settlement is made available in the real-time U.S. dollar (USD) value of TCS tokens.
The carrier can then accept settlement via direct deposit from TCS. After receiving the balance in its crypto wallet, the carrier can immediately sell through its exchange market to regain USD liquidity. By taking settlement via TCS, and being able to sell in a matter of minutes, carriers avoid both factoring costs and crypto volatility.
By industry averages, TCS estimates every factoring freightliner can recapture a significant portion of its net revenue. In the supply chain, reducing operating costs makes transportation companies more solvent and applies downward pressure on freight rates. In time, the costs of goods and, more specifically, food prices, can decrease.
Regarding the company’s adoption, CEO Todd Ziegler shared:
“TCS already has truckers involved in the beta, and we were just approached by two more large strategics. One has 223 trucks. The second is one of the largest companies in the U.S. managing freight documents, with over 500,000 transportation users. It speaks volumes that these companies are already interested in integrating with TCS.”
The future of freight and blockchain
Earlier this month, TCS presented its solution at the Future of Freight conference to over 20,000 attendees and has since gained traction in both the crypto and transportation communities with features in FreightWaves, business publications and other related media.
With many strategic relationships already in play, TCS believes it is in a strong position to help carry the transportation industry forward into web3. In looking ahead to the intersection of the two industries, Ziegler offered:
“Following recent court rulings and the acceleration of the DCCPA [Digital Commodities Consumer Protection Act] on Capitol Hill, we’re going to see U.S. crypto exchanges eliminate several coins. Many exchanges are already struggling for revenue and AUM [assets under management], and they’re not going to stick their necks out in the wake of FTX. The projects with no real use case will be the first to go, and the digital assets with value propositions to industry will see greater market share.”
Material is provided in partnership with TCS
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.
How blockchain technology is used in supply chain management?
Blockchain benefits the supply chain industry by enhancing the traceability, transparency and tradability of goods and services that move along the value chain.
The future of blockchain-based supply chain?
The demand for the blockchain-based supply chain is driven by customers’ need to know the specific source of their items and whether they were made according to ethical standards.
Blockchain technology use cases in supply chain management have the potential to address concerns in traditional supply chains, like removing the need to prepare burdensome paperwork. Moreover, a decentralized, immutable record of all transactions and organizations’ digitization of physical assets can make it possible to track products from the manufacturing unit to the delivery destination, enabling a more transparent and visible supply chain.
However, the implementation of blockchain in the supply chain is yet to achieve mainstream adoption as high-level expertise is required to reap the benefits. Additionally, because blockchain technology is still in its infancy, it is governed by various laws in many nations, which would affect supply networks. Despite this, blockchain-based solutions will likely gradually replace conventional supply chain processes and networks; this transition won’t occur all at once.
How blockchain enhances tradability in the supply chain?
Tradability is one of the unique advantages of blockchain technology. Blockchain platforms ensure tradability via the tokenization of assets. Tokenization turns a tangible object, such as a product, into a digital asset, and the system keeps one token for each product, which can be exchanged in the market.
Blockchain platforms help tokenize an asset by dividing it into shares that digitally represent ownership. Users can transfer ownership of these tokens without actually exchanging physical assets because they are tradeable. Moreover, automated smart contract payments help license software, services and products accurately.
In addition, the consensus is provided via blockchain, meaning that there is no disagreement over transactions in the chain by design. The chain’s unique ability to track ownership records for physical assets like real estate and digital assets is made possible because every entity uses the same ledger version.
You might wonder why companies prefer asset tokenization instead of directly paying in fiat. One possible reason is that smart contracts enable peer-to-peer payment that speeds up the transfer of funds, lowering the time it takes to reimburse businesses for goods or services supplied.
Additionally, token payment prevents fraudsters from taking advantage of chargeback situations to steal from businesses. Once a payment is made, it is sent to the business’s blockchain wallet account, and no unapproved withdrawals can be possible.
How blockchain enhances traceability in the supply chain?
To trace the activities along the supply chain more efficiently, concerned parties can access price, date, origin, quality, certification, destination and other pertinent information using blockchain.
Traceability, as used in the supply chain sector, is the capacity to pinpoint the previous and current locations of inventory and a record of product custody. It involves tracking products as they move through a convoluted process, from raw materials to merchants and customers, after passing through many geographic zones.
Traceability is one of the significant benefits of blockchain-driven supply chain innovations. As blockchain consists of decentralized open-source ledgers recording data, which is replicable among users, transactions happen in real-time.
As a result, the blockchain can build a supply chain that is smarter and more secure since it allows for the tracking of products through a robust audit trail with almost concurrent visibility.
By connecting supply chain networks through a decentralized system, blockchain has the potential to enable frictionless movement between suppliers and manufacturers.
Furthermore, producers and distributors can securely record information such as the nutritional value of items, product origin and quality and the presence of any allergens using a collaborative blockchain network. In addition, having access to a product’s history gives buyers more assurance that the items they buy are from moral producers, thus making supply chains sustainable.
On the contrary, if any health concern or non-compliance with the safety standards is discovered, necessary action can be taken against the manufacturer based on the traceability details stored on the distributed ledger.
How does blockchain technology improve supply chain management?
Unlike traditional supply chains, blockchain-based supply chains will automatically update the data transaction records when a change is made, enhancing traceability along the overall supply chain network.
Blockchain-based supply chain networks might need a closed, private and permissioned blockchain with limited actors, in contrast to Bitcoin and other financial blockchain applications, which may be public. However, the possibility of a more open set of partnerships may still exist.
In blockchain-based supply networks, four key actors play roles, including registrars, standard organizations, certifiers, and actors:
- Registrars: They provide network actors with distinct identities.
- Standard organizations: These organizations develop blockchain rules and technical specifications or standards schemes, such as Fairtrade, for environmentally friendly supply chains.
- Certifiers: They certify individuals for involvement in supply chain networks.
- Actors: A registered auditor or certifier must certify participants or actors, such as producers, sellers and buyers, to retain the system’s credibility.
How a product is “owned” or transferred by a specific actor is an intriguing feature of structure and flow management and among the benefits of blockchain in supply chain management. But does blockchain make supply chain management more transparent?
As the concerned parties are required to fulfill a smart contract condition before a product is transferred (or sold) to another actor to validate the exchange of goods or services, and the blockchain ledger is updated with transaction information after all participants have complied with their duties and processes, overall transparency across the value chain is improved.
Additionally, the nature, quantity, quality, location and ownership product dimensions are transparently specified by blockchain technology. As a result, customers can view the continuous chain of custody and transactions from the raw materials to the final sale, eliminating the requirement for a reliable central organization to administer and maintain digital supply chains.
How is the modern supply chain evolving?
Contemporary technologies like artificial intelligence (AI), robotics and blockchain are being incorporated into the digital supply network, which combines data and information from various sources to distribute goods and services along the value chain.
Supply chain infrastructure develops from strictly physical, functional systems to a vast, linked network of assets, data and activities. For instance, by utilizing AI algorithms, businesses may extract insights from large data sets to proactively manage inventory, automate warehouse processes, optimize critical sourcing connections, enhance delivery times and develop novel customer experiences that raise customer satisfaction and increase sales.
In addition, AI-powered robots help automate various human-owned manual tasks, such as order picking and packing processes, delivering raw material and manufactured goods, moving items during storage and distribution and scanning and boxing items. According to Amazon, robots allow it to hold 40% more inventory, enabling it to fulfill Prime shipping commitments on time.
Furthermore, as blockchain is immutable in nature, it can be issued to track and trace the source of products and identify counterfeit items and fraud within the value chain. For instance, if a business is transporting perishables like cheese, which must maintain a specific temperature at all times.
The company transporting the cheese can determine whether the temperature has risen beyond the permitted threshold during the voyage or impacted the cargo, enabling them to minimize problems with food quality.
What is supply chain management and how does it work?
Supply chain management actively streamlines a company’s supply-side operations from planning to after-sales services to enhance customer satisfaction.
Supply chain management (SCM) refers to controlling the entire production flow, from acquiring raw materials to delivering the final product/service at the destination. In addition, it handles the movement of materials, information and finances associated with a good or service.
Even though the supply chain and logistics are sometimes confused, logistics is actually only one part of the supply chain. Traditional supply chain management systems involve steps like planning, sourcing, manufacturing, delivering and after-sales service to control the supply chain centrally.
That said, the process begins with deciding how to meet customers’ needs and selecting suppliers to source the raw material to manufacture the product. The next step is to determine if the manufacturer will outsource or take care of delivery. And after a product is delivered, it is a network that will offer after-sales services, such as handling product returns and repairs, among others, which is crucial for customer satisfaction.
On the contrary, modern SCM systems are managed using software from the creation of goods and services, warehousing, inventory management, order fulfillment, information tracking and product/service delivery to after-sales services. For instance, numerous robotic and automated technologies are used by Amazon to stack and store goods, as well as to pick and pack orders. The company has also begun utilizing electric drones to transport packages weighing less than five pounds in selected United States regions.
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ETH Merge will change the way enterprises view Ethereum for business
Industry experts explain how the Ethereum Merge will impact enterprise adoption for business use cases.
A recent report from the Ethereum Enterprise Alliance (EEA) highlights how the Ethereum ecosystem has matured to a point where the network can be used by businesses to solve real-world problems. From supply chain management use cases to payment solutions utilized by companies like Visa and PayPal, the report demonstrates how the Ethereum network has grown to become one of the most valued public blockchains.
Although notable, the EEA report also points out that the rapid growth of the Ethereum ecosystem has created a number of challenges for companies, specifically regarding energy consumption, scalability and privacy. For example, the document states that “sustainability was cited as one of the main concerns, along with transaction fees, in relation to using the Ethereum Mainnet.” The report further explains that the transparency associated with a public blockchain like Ethereum has been a hurdle for enterprises seeking data security and trust.
As such, upgrades such as sharding and layer-2 (L2) scalability solutions remain critical for businesses using the Ethereum network. Yet, the complex nature behind such implementations continues to be difficult for companies to navigate. For instance, the EEA report states that “Many layer 2 solutions and sidechains are relatively new projects, with relatively new technology. They do not necessarily have the track record or proven security and stability of the Mainnet.”
The Merge will change how enterprises view Ethereum
However, industry experts predict that the Ethereum Merge, which is scheduled to take place on Sept. 14, will likely improve enterprise adoption. Paul Brody, global blockchain leader at EY, told Cointelegraph that while the Merge will not affect most enterprise use cases that are presently in use, it will change how businesses perceive Ethereum. He said:
“For years, competing layer-1 networks have talked about how Ethereum can’t get the Merge done. The incredible organizational maturity of Ethereum has been working nicely in the background to do it in a careful and professional manner. As an enterprise, that’s the kind of institutional maturity I want to see.”
Although the Merge has been in development for several years, Brody explained that upgrades on mission-critical infrastructure should never be rushed. As such, he believes that this will remain a key point for businesses using the Ethereum network. “I think future efforts to dismiss Ethereum won’t get much airtime in the post-Merge era,” he said.
While it’s too early to detect how enterprises will react to the Merge, Robert Crozier, chief architect and head of global blockchain at Allianz Technology, told Cointelegraph that his firm will monitor the progress of the Ethereum Merge to see how it stabilizes certain use cases.
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This is noteworthy, as Crozier shared that Allianz has only considered Ether (ETH) and Ethereum-based use cases for experimentation purposes on a small scale. The insurance giant currently uses Hyperledger Fabric and the decentralized ledger platform Corda to streamline cross-border auto insurance claims throughout Europe. Crozier added:
“At Allianz, our International Motor Claims Settlement product utilizes Hyperledger Fabric at its core. We would need to understand and be confident that other protocols like Ethereum would deliver the similar benefits in terms of ease of use, scalability and finality.”
With benefits in mind, Brody explained that the Merge will eventually result in better scalability and privacy for enterprises. “I think we’re heading into a new era of enterprise applications. With both scalability and privacy maturing, it will be possible to address enterprise process needs quite comprehensively in the future,” he said.
Shedding light on this, Ivan Brakrac, senior decentralized finance market strategist at ConsenSys, told Cointelegraph that although the Merge does not directly increase scalability, a number of planned upgrades to Ethereum will address scalability over the next few years.
For example, Brakrac explained that transitioning the Ethereum network from proof-of-work (PoW) to proof-of-stake (PoS) was the first step to enable “shard chains.” As Cointelegraph previously reported, sharding is the act of dividing up a database, or in this case, the blockchain, into various smaller chains known as shards.
“This will reduce network congestion and increase transaction throughput,” Brakrac remarked. This is key for adoption, as Brody shared that EY’s enterprise clients looking at supply chain applications are going to need support for 2–20 million transactions per day. “Pre-Merge Ethereum could not have accommodated this,” he said.
Regarding privacy, a report entitled “The Merge for institutions,” published by ConsenSys on Sept. 5 mentions that L2 solutions also address privacy concerns for enterprises. An increase in L2s will unlock greater privacy mechanisms for business use cases.
For example, Brody explained that EY developed a zero-knowledge proof L2 scaling solution known as Nightfall to handle Ethereum gas constraints and keep fees low. According to Brody, multiple powerful L2 networks will enable different options for enterprises that may require more gas and bigger transactions. He elaborated:
“Privacy starts to unlock a much bigger set of use cases for enterprise users. For example, instead of minting one token that represents a batch of product and gives origin information, I can mint one token for each piece of inventory, and then I can manage specific supply chain inventory levels across a multi-company network on Ethereum.”
In addition to scalability and privacy, sustainability concerns will be addressed once the Merge is implemented. According to Brakrac, Ethereum currently uses an inordinate amount of electricity, noting that the Merge will reduce energy usage by 99%. “This will make Ethereum very sustainable in the long run. By design, this further secures the network and resolves an environmental concern which is net positive from the institutional adoption standpoint,” he said.
Indeed, industry experts believe that sustainability efforts addressed by the Merge will be critical for enterprise adoption. Dan Burnett, executive director of the EEA, told Cointelegraph that while L2s and sidechains have served as bandages on sustainability concerns, large organizations with environmental, social and governance goals tended to shy away from building solutions on Ethereum because of its reputation for being environmentally unsustainable. Yet, he noted that with these concerns being addressed, the Merge may enable the Ethereum business ecosystem to leap ahead.
Yorke Rhodes III, co-founder of blockchain at Microsoft and board member and treasurer of the EEA, further told Cointelegraph that the Merge will put to rest one of the main concerns for enterprises that have a big focus on environmental impact, such as Microsoft.
“This removes one of the key arguments enterprises raise when evaluating whether to build solutions on Ethereum mainnet,” he said. To Rhodes’ point, Crozier mentioned that moving to a more environmentally friendly proof-of-stake mechanism will mean that some enterprises, like Allianz, will take a second look at Ethereum.
Benefits not immediate
All things considered, the Merge will likely increase enterprise interest in Ethereum due to the advancement of the network. Moreover, Rhodes believes that removing the key critique of sustainability will encourage additional movement to the Ethereum Mainnet, even if this is just as a base layer for security. “As a key step in realizing the vision of Ethereum, the ETH merge sets things up for a closer enterprise review sooner rather than later,” he said.
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However, it’s important to point out that the benefits promised by the Merge won’t be seen immediately. According to Brody, it will take at least 12–24 months until privacy-enabled use cases are established following the Merge. He said:
“I hope to see pilots by the end of this year, but feedback loops and infrastructure maturity takes time. Unlike consumer applications, there’s little patience among enterprise buyers for products that don’t work on the first go-round and little willingness to experiment. Enterprise buyers are generally quite conservative, and so the cycle will take longer than consumer users.”