Data Matters

Aug 4 2017   10:08AM GMT

Blockchain beyond the realm of financial services

Brian McKenna Profile: Brian McKenna

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This is a guest blog post, in which Jody Cleworth, CEO of MTI [Marine Transport International], explains why blockchain is, in his view, good for businesses in the real economy, including the shipping industry.

Blockchain is best known as the technology behind the bitcoin cryptocurrency. Although this is its most common association, it is important for businesses to recognise that blockchain is a standalone technology, with its value reaching beyond the realm of cryptocurrencies and financial services.

Blockchain is unique in its ability to provide a secure, yet transparent, platform that enables permissioned access to private transactions and digital records. Even more impressively, it can do this in real time and can be used in just about any industry. To name but a few, shipping, manufacturing, and real estate are beginning to recognise and exploit the promise of blockchain: that of absolute trust and accessibility.

Simply put, blockchain is a way of recording data: that is, anything that needs to be individually recorded and certified as having happened. It is a type of digital ledger that can be used to record a wide range of different processes. It is of most value when it comes to recording the steps in a process that involve a wide range of parties, where responsibility is handed off at each point. If a supply chain is blockchain enabled, absolute certainty can be created at each step of the process. Placing a digital ‘block’ on the ledger indicates that a process has taken place, and all parties have the ability to view this. It is similar to using a Google document, which is shareable and visible to all those inputting data.

In the business world, blockchain technology is becoming increasingly attractive for tracking the movement of items through supply chains which link a variety of organisations. A container logistics company, for example, is obligated to interact with stakeholders such as shipping lines and port authorities, and so there are many points at which accountability could become an issue. In order to ensure that containers are shipped and received in a good state, a safeguard is needed. Blockchain ensures that each party within the supply chain takes responsibility for their own dataset, but also shares their data with all other parties.

Early Proof of Concepts in the shipping industry have attested that greater efficiency is achieved by supporting supply chains with blockchain technology. Shipping companies, suppliers and distributors have recognised that ‘smart contracts’ can decrease costs and increase profitability, as a result of capitalising on the links between supply chain actors. The use of blockchain in the shipping industry serves as a promising example for all sectors that engage in a series of interrelated processes, as blockchain increases collaboration between parties, heightens visibility, and reduces resistance.

In addition, the distributed nature of a blockchain database makes it harder for hackers to attack. Central servers that store data are easy targets for cyberattacks, but the blockchain model does not include this. Instead, the data is copied identically across each ‘node’ in the network, meaning that if one computer is successfully targeted, it does not result in business devastation. Ultimately, in order to hack a blockchain database, simultaneous access to every copy of the database would be needed.

Blockchain has the ability to empower a multitude of industries to better adapt to the digital economy. Embracing this technology allows executives to assert greater control over their transactions, whilst protecting the privacy of terms and conditions between parties. Essentially, blockchain creates a secure business environment, where reliable transactions become a reality without the need for a centralised authority.

6  Comments on this Post

 
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  • infoscreed
    You say that "Blockchain ensures that each party within the supply chain takes responsibility for their own dataset, but also shares their data with all other parties." But it doesn't sound like Blockchain independently verifies that the data is ACCURATE, only verifies the data as input by each party?
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  • forstie
    Hi Brian,
    If all data is copied identically across all nodes, why do you state that there wouldn't be devastating consequences if the security of one nodes was breached?
    Thank, Scott
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  • Brian McKenna

    Hi Scott, interesting question. One for the author, Jody Cleworth.

    Thanks

    Brian

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  • JodyLC
    Hi All 

    @forstie: -  

    Q: If all data is copied identically across all nodes, why
    do you state that there wouldn't be devastating consequences if the security of
    one nodes was breached?



    Data, is
    independently validated by each node in consensus.  If security is
    breached on a node, the attacker can only change data on that node. This data/node will then be
    flagged as compromised and ignored by the rest of the network.

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  • JodyLC
    @infoscreed

    Q: You say that "Blockchain ensures that each party
    within the supply chain takes responsibility for their own dataset, but also
    shares their data with all other parties." But it doesn't sound like
    Blockchain independently verifies that the data is ACCURATE, only verifies the
    data as input by each party?



     



    A: It depends on the nature of the data, for an example I may
    enter an order for 10 tons of A grade mild steel plates.  This is my order
    so the accuracy of this data is determined by my authentication to the network
    (ie, I am a treasurer and therefore permissioned to raise an order).  



     



    However there is the risk the supplier delivers a lower
    grade quality to the shipper, or the shipper may leave the steel unprotected
    from damp and salty environment.  



     



    How do we determine who is responsible for the steel when it
    arrives in poor condition?  Currently that is done by using quality
    assurance practices.  Professional attesters check, test and issue
    certificates at salient points in the process of moving goods from supplier to
    buyer.  



     



    We integrate with the systems used by attestors allowing
    certified data onto the ledger so a buyer and supplier monitor quality in real
    time.  By setting thresholds they will receive alerts on quality and
    accuracy concerns as they happen.



    We also use SMART CONTRACTS to sanitise data coming into the network, we are therefore able to flag inconsistent data entering the network.


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  • vincer
    If I wanted a private block-chain, is there a way for me to leverage existing nodes using the same protocol (Ethereum for instance) rather than establishing my own system of nodes? It seems that if I wanted to utilize block-chain as part of a validation for some process or transaction, I'd want to have a large number of nodes to ensure that a compromise would require pwnage of dozens of nodes simultaneously to gain the >66% to force the compromised fork. If I only had 3 nodes, then that is distinctly possible... if I have 300 nodes, then nearly impossible... On the surface, it seems that establishing that large distribution would be difficult on my own. Thoughts?
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