Bitcoin is overhyped. If you read my piece from earlier this spring – Spare the Bitcoin Spoil the Blockchain – you know I won’t be making any speculative bets on the crypto market. But what about blockchain, the distributed database and ledger system that powers bitcoin?
My quick take: There’s a lot of hype, a lot of talk and even more questions. But there is undeniably demand for solutions. Some analysts are projecting the market for blockchain-related products and services will reach $14 billion over the next several years. Interestingly, a lot of the buzz comes from technology companies that have nothing directly to do with blockchain. They talk-the-talk because the conversation is everywhere and so they want to be included, but few of them are actually helping their customers take advantage.
To gain some clarity, I spoke with Chris Kirchner, the co-founder and CEO of Slync, an intelligent, blockchain-based, platform that’s enabling blockchain deployment in the market. Slync is already running a number of pilots for enterprise clients and claims to offer a platform that makes getting started with blockchain fast and easy. My first question for Kirchner was around market adoption.
“No one has fully deployed blockchain in their supply chain yet. That said, many companies are actively piloting the technology around different supply chain use cases and seeing success. Once other pilots begin proving the business case, expect to see broader and more rapid adoption,” said Kirchner.
The application potential is broad. Blockchain could pave the way to faster transactions, easier compliance, more effective validation and lower costs. “We’re seeing a lot demand around asset tracking – really anything of value that exchanges multiple hands across the supply chain is a good use case for blockchain.”
The big benefits, according to Kirchner, are accountability, efficiency and transparency. “Anyone that’s ever run a global supply chain has known the deal. They’ve been hurt by a supplier. Whether it was an error, a shipping delay, a quality or safety issue. The point is, no one has been immune. Blockchain will deliver an improvement. It makes everyone more accountable by providing a clear, transparent view of a product’s journey by recording supply chain events – like an asset exchange from one party to the next — as they occur.”
The visibility created by blockchain —the ability for members to collectively track an asset on a distributed ledger— expedites decision making and reduces supply chain disputes. Today, when something goes wrong, there’s a blame game. Everyone ends up pointing fingers, legal battles ensue, “…and it ends up costing more in time and money than the actual shipment was worth,” said Kirchner. “With blockchain, there’s no need to point fingers or invest in lengthy investigations. Everyone can see who is at responsible, and when and where the breakdown occurred. It’s all there.”
While the potential benefits are immense, confusion around how to get started persist. As is the case with most emerging technologies, misinformation is deep.
For companies interested in testing blockchain across their supply chain, Kirchner said there’s four steps everyone needs to take: find a platform, pick an asset to track, identify the partners that will touch the asset, and agree on the critical information that needs to be collected and shared. “It may sound simple, but it all boils down to finding partners with similar goals for their supply chains. While network anchors can drive subordinates to participate, it misses the point.”
It is rare to witness a hyped technology live up to its billing. And while it may be too early a call with respect to realizing a grander vision of all-things-blockchain, in a pure supply chain context, it’s difficult to not jump on the current bandwagon.
Block chain delivers the transparency everyone says they’ve wanted. The collaboration it enables is based on a consensus protocol that quite literally exposes everyone’s hand. With that in mind, while blockchain’s adoption could be slowed by players that don’t want to have their bluffs called, I’m betting on a new, block-chain-based rules set that rewards everyone with good cards. It’s progress.