Traditionally the “blockchain” has been associated with finance. Surely in your mind you have this word linked to cryptocurrencies (and it is possible that even with bitcoin). However you should know that in recent times, the term blockchain increasingly has a greater presence in the logistics sector.
We have been talking for a while about a new technological revolution that will change the future of trade and transport of goods. In FACTOR 5 we are immersed in the new trends that make the blockchain a reality, using it more and more in operations.
What is the blockchain?
Explaining it in a simple way, we can define the blockchain as a huge database where instead of storing the information in a single database, it is stored in many different computers. In this way, a copy of the information is obtained, making this network of devices interconnected, decentralized and working collaboratively.
Surely, at this point you will be asking yourself, who manages and controls the information on these computers? In this sense you should know that this system does not need a specific profile that validates your information, since each device has permissions. To give you an example, when a piece of information is included in the network, it is sent to the rest of the devices so that they can validate it individually. When the different nodes of the operation have been validated, that new information will be included permanently, creating a copy in each of the devices. This causes that each nexus of the network keeps the information.
Why use the blockchain?
The blockchain is one of the safest systems because:
- It has a lot of transparency: all the changes that occur are recorded in each of the devices. In addition to this, the information is accessible.
- You can include new information in the system but not modify or delete existing information.
- Being the information shared on all devices, it avoids having so many problems regarding errors or errata in data.
- It offers greater privacy and anonymity. All the information can be encrypted without generating problems regarding the reliability of the network.
What is blockchain used in the logistics sector?
The truth is that the blockchain is quite recent, however it is so reliable that it has been used in both the financial and logistics sectors. One of the most recurrent uses is applied in so-called “Smart contracts”. You can make transactions between two parties, being validated by a network made up of thousands of computers. This makes their uses very broad.
International trade and the blockchain
When we are talking about international trade, we must be aware that many different agents intervene in this type of operations, registering each step and having many associated documents. The blockchain allows you to create a large network that includes the different parts of the logistics process.
Any document that is part of the process can be validated almost automatically. In this way, we can manage everything (from documentation to payments) digitally and with greater speed (without the need for third parties). This process also serves to minimize possible communication errors, and can always return to verify the information to a reliable data source.
What happens with the blockchain in land transport?
One of the biggest advantages offered by the blockchain for road transport is the possibility of collaborative networks without the need for intermediaries. In short, virtual spaces can be created with secure platforms. All this means that cargoes can be managed in a more efficient way anywhere in the world. If we join it to the “smart contracts” we will reduce the defaults and the delinquency.
How the blockchain joins traceability
When blockchain systems are integrated into logistics processes, we are able to record (in real time) the status of a product. This can be carried out independently of the process of the logistics chain in which it is located. In this process, you can include even more information (for example, temperature at which the merchandise has been kept, area where it is located …).