A basic definition of blockchain isn’t that tough to grasp—it’s like a shared spreadsheet (a “distributed ledger”) that can’t be changed by any individual member without the approval of their trading partners. That distributed design model generates a high level of data security, which means the technology could be a helpful tool for supply chain tasks like tracking goods or making payments.
For example, FedEx has launched a pilot project that uses blockchain to improve supply chain visibility by supporting digital data exchange among shippers, carriers, and retailers, company executive Sean Healy, senior vice president of transportation, international, planning, and strategy, said in a published report.
That high security also lets some groups make their own web-based money, using blockchain as the technological foundation for virtual currencies like Bitcoin and Ethereum. But blockchain quickly gets weird when you look at some of the more creative ways it gets applied. Try to follow me here:
- CryptoKitties is a blockchain game where players collect and breed digital cats in a platform based on the Ethereum network. If this sounds silly, then you should know that some people take it very seriously—the company recently raised $12 million in venture capital funding from the big name investors Andreessen Horowitz and Union Square Ventures.
- Fishcoin is a blockchain-based utility token that rewards fishermen and fish farmers for providing data that supports food traceability and could help reduce seafood industry mislabelling and fraud. Fishermen who share information about their catch with restaurants or grocery stores could benefit when smart contracts transfer a Fishcoin micropayment into their crypto-wallets, giving the fishermen funds to spend on paying their bills.
- Slovenian supply chain traceability service provider OriginTrail recently launched a blockchain-based token sale—also known as an initial coin offering (ICO)—to raise money for its plan to build a blockchain-based decentralized data exchange network that would support trade in a utility token called “Trace” to reward supply chain organizations for increasing transparency in their trading practices by sharing Internet of Things (IoT) data.
- Empowr, a profit-sharing social network and e-commerce marketplace, is creating a cryptocurrency that it will give away for free to its community of members. Users can earn those coins—an activity known as “mining cryptocurrency”—by posting new content or by selling goods and services, then turn around and spend their loot in the platform’s own marketplace or on advertising and subscription services on the empowr site.
- A smartphone app called “Sweatcoin” uses the phone’s GPS and accelerometer to count users’ steps wherever they walk, and convert those strides into units of a blockchain-based virtual currency—also called sweatcoins—that can then be spent on buying goods and services sold through the app’s own e-commerce marketplace. At last count, 1,000 steps would earn you 0.95 sweatcoins, worth about $3 per sweatcoin, so get hiking!
But wait, what does all of this have to do with material handling or international shipping? That remains to be seen, but blockchain is enabling new ways of handling the basic activities that fuel logistics business transactions. In the words of CryptoKitties, “The future is meow.”