There are a growing number of companies and organizations experimenting with the application of blockchains to several types of supply chains. At least on paper, blockchain is a perfect fit for the process of tracking raw materials, through manufacturing, distribution, purchase, consumption and use by customers – along with all the logistics in between these steps.
By having the particular suppliers, transportation companies, import/export and other government agencies, distributors, wholesalers and retailers who participate in any given supply chain on a blockchain – it becomes far easier to a) ensure invoices are accurate, b) trace foods back to the source (e.g. to limit health risks – and prevent deaths like those from a 2012 episode of e-coli infected spinach), c) authenticate the resources in goods (e.g. ensure the absence of “blood diamonds” in jewelry), and d) lower the “frictional cost” of erroneous paperwork (bills of lading, manifests, etc.).
If there’s one company at the center of applying blockchain technology to supply chain integrity – it’s IBM. IBM is testing ‘blockchain powered supply chains’ out with WalMart (tracking Chinese pork from source to consumer), Maersk (replacing the mountains of paperwork as goods get shipped across land, sea, ports and borders),IBM’s own Global Finance division (payment dispute resolution), Heija (Chinese supply chain management company), and several other projects. In addition, there are several start-ups focused on supply chain blockchains – including Provenance, Consensys, and Everledger.
Energy is another industry sector where there is an accelerating amount of development, prototyping, discussion and (probably) hype regarding the use of blockchain. Just on our little site here at Blocktonite, we’ve catalogued over 65 articles, a dozen start-ups, and innumerable videos on energy and blockchain.
Right now, there are two emerging uses, and both represent the ability of open exchanges for people to sell and buy energy directly from each other (you have to wonder what utility companies think about this). In one use, solar panel owners offer any surplus Renewable Energy Credits (RECs) they may have earned to anyone who want them. In this case, the buyer is effectively buying a tax credit. The advantage of this approach is that it doesn’t require a fundamental change in the existing power grid utility infrastructure. I might buy via the blockchain windmill RECs generated by a windmill farm 2,000 miles away. The best example of this use is a pilot that a start-up called LO3 Energy is conducting in conjunction with blockchain developer Consensys and literally a street of houses in Brooklyn NY.
The second use case is more interesting. In this approach, a community has their own “microgrid” that everyone is hooked into, and all the houses have smart meters. Suppose I have excess power available from my solar panel, and suppose you need power. You and I can have a “smart contract” on the blockchain supporting the microgrid – so that you get power from me when I have it and you need it. You can even customize your power consumption in line with your priorities (e.g. heat, the economy, cost). The blockchain allows me (the energy seller) to collect currency tokens that I can use elsewhere. This use case is also on the drawing board for LO3, along with other energy startups like Gridularity, Scanergy, Power Ledger, and several others.
But the overall point is this: one broad application of blockchain enabled “distributed ledgers” is the facilitation of direct so-called “prosumer to consumer” economies, taking us to the “next step” beyond Uber, Lyft, AirBnB to the true “gig economy”.
Here at Blocktonite, we are collating 10 to 20 new blockchain articles and documents a day. When we find a document, video, or book we feel is especially enlightening, we are adding that item to our Blocktonite Library. We will put no item in the library without reading or viewing beforehand.
Keep checking the Library for new items!
Here’s one example, among dozens identified to date, of using blockchain technology. Say you receive a document from me that’s rather important, say – a contract. You want to validate that the document you received was indeed written by me, and neither you nor me want to spend the time and money to have a trusted third party (like the guy in the picture above) to essentially notarize the document. A start-up company known as Stampery has developed a Microsoft Add-in to support this type of scenario using blockchain.
Here’s how it works: say I compose the contract in Microsoft Word. When I’m done, I click a button in Word (the Stampery add-in) which then “hashes” the document. A hash is a mathematical technique of creating a fixed block of characters (which will seem random to any viewer or software program) based on an input file (in this case, my contract). In this specific case, the “hash” is 256 seemingly random characters that represents my contract. This hash is then stored on the Bitcoin blockchain.
Now – I send the contract in Word format to you. You can read the document in Word, but you want to be certain of the document’s validity. You click the Stampery add-in button “certify” – which then applies the exact same hashing technique to the document you are reading, then compares that document to the hashed version on the Bitcoin blockchain. If the two hashes match, you get a message certifying the document I sent you.
This all may not sound too glamorous – but it is the “immutability” characteristic of the blockchain which assure document authenticity – and for a whole lot less time and money.
One of the “industry verticals” that Blocktonite is tracking is the broad area of applications to protect intellectual property (IP). And within IP, the music business is one area of growing interest. The issue: unless you are the Rolling Stones, artists today get a ever decreasing fraction of the royalties due them when their song is played, or covered by another band, or their lyrics are used, or their work is used by advertisers, etc. Some musicians (such as Imogen Heap, Nick Mason (Pink Floyd), 22Hertz, and others) have spoken out in favor of using blockchain technology to manage the distribution and use of music, and making this usage far more transparent and fair. Mycelia is one group of musical artists promoting blockchain use, and one start-up, UjoMusic, is working on developing a streaming service based on blockchain smart contract technology. 22Hertz has created hashes of some of their songs (both lyrics and melody) as proof of their ownership.
This past week the whole notion of using blockchain for rights management in music got a boost when ASCAP, SACEM and PRS announced a joint blockchain project to improve data accuracy for music rightsholders (such as artists).
4/19/17: here’s an update. Yesterday Tokenly announced a new music service using blockchain: Token.FM. I just signed up – we’ll see how it works.
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Several US states are seriously exploring legislation to promote the use of blockchain. Delaware is considering regulations that would allow Delaware incorporated companies to use blockchain technology to keep track of the stock they have issued. This could solve a number of problems: for example, the February 2017 case of Dole Foods – which lost track of millions of shares it had issued.
Blocktonite also notes blockchain legislative activity in Arizona (to make smart contracts legal), Vermont (recognizing the legality of blockchain records), Nevada (prevent local authorities from taxing blockchain use), Illinois (house resolution for creation of a working group), New York (issuance of Bitlicenses for virtual currency operations).
In addition, there are several and accelerating efforts at the Federal level – both in Congress as well as the Executive Branch – a topic for a future Blocktonite exclusive!
Since I started a daily routine of skimming articles on blockchain (297 days ago) – clearly the number one company with at least the most press is IBM. As of this morning, I’ve collected 99 articles on Big Blue and blockchain and that’s not counting a number of articles related to other companies working with IBM for industry applications – like Walmart, DTTC, Maersk and more. They are building their platform and offerings around the hyperledger architecture. or better or worse: IBM is into blockchain big time.
Today’s “find” in our daily scan of blockchain activities is a company called EncrypoTel – the idea is to offer secured voice over internet protocol (VOIP) communications for caller authentication and encrypted communications – for the general business market.
Today’s interesting Blockchain article is a blog post at MIT – announcing a prototype to build a blockchain based approach to an individual’s identity – under the control of the individual. The interesting thought in the blog post is the fact that up until recently – you proved your identity by SHOWING UP somewhere. But with the explosion in online transactions the ‘physical you’ is removed from the ‘you’ attesting to your identity online.
The second interesting Blockchain article today is this 30 minute video on “Blockchain and us“. I’ll try to give it a view and summarize later this week.
Yours truly, Captain Blocktonite