Anyone working in the blockchain sector has to listen to the congressional hearing about cryptocurrencies, that conclude a couple of weeks back. In addition to the debate about the legalities of Cryptocurrencies, and, ICOs, there were presented; many interesting industry applications were presented too. The interesting piece about the benefits of the blockchain starts at 1 hr: 25 minutes about here.. and ends 2 minutes later.
Recently, Walmart and IBM demonstrated how the blockchain reduces shipment tracking time to about 2.2 seconds from 2 weeks. In providing traceability of transactions through a chain of records, and, almost instantaneous validations, the blockchain reduces the query times across data stores. Industries that traditionally have relied on record keeping and verification benefit the most from the Blockchain.
Improvements in tracking transactions
An article here cites that the blockchain can tremendously improve efficiencies in the food chain; right from the farmer till the end consumer. In addition, due to the persistence of identity and records on the Blockchain, the data can be queried, validated and fetched almost instantaneously. This creates immense possibilities, for firms, moving large commodities across geographic boundaries and locations. Such tracking capabilities that are dependent on multiple players integrating and updating their logistic management systems are now vastly simplified through the implementation of smart contracts.
One of the important takeaways from any regulatory hearing (including this one) was the proposal to legally dileneate Cryptocurrency and the Blockchain. What this means is that regulation (when it arrives) will treat blockchain applications differently than cryptocurrency. Many blockchain applications do not need tradeable tokens. Though creating a token of value is beneficial for many things such as
a) setting up contracts between different economic actors,
b) making network effects fungible for all users by tangibly rewarding stakeholders,
c) providing a viable funding mechanism for the business,
d) Locking-in customers by increasing switching costs.
Overall, the blockchain applications can influence the entire supply chain industry. This delineation when regulation hits this nascent sector will hopefully allow innovation to continue un-hindered.