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What is Blockchain?
To fully understand the potential of blockchain technology in the business world, we need to go back to its origins. The idea of blockchain was born in 2008 with the creation of the cryptocurrency Bitcoin. Developed under the principle of “peer to peer” and separate from Bitcoin, blockchain is a transparent, secure technology that operates without a central control entity. In simpler terms, blockchain was created to secure Bitcoin transactions. However, its applications extend far beyond cryptocurrency.
The Impact of Blockchain on International Trade
Transparency and security are two major advantages of blockchain technology, especially in sectors like maritime transport and international trade. These industries have long been plagued by fraud. Take, for example, the case of several international banks that suffered losses in 2014 due to credit lines extended to a commodities trading company in Qingdao, China. Outdated and unreliable procedures, such as manually recording ownership on paper, allowed the company to obtain multiple credits using the same stock of commodities as collateral. The lack of traceability made it impossible for banks to verify the information provided by the trading company. Implementing blockchain would have put an end to this fraudulent scheme at the attempted stage.
Blockchain’s shared network technology is the perfect solution for ensuring complete supply chain traceability. Gone are the days of paper registers and long processing times involving multiple organizations. With blockchain, conventional control documents can be digitized and encrypted, providing secure and transparent access to all stakeholders at every stage of the supply chain. Information such as weight, seller identity, and quality can be recorded in a unique digital fingerprint on the blockchain.
The benefits of this system include reduced fraud, transport delays, and costs associated with international maritime freight. According to Jérémie Rolle, a data and analytics consultant at PwC France, some industry players predict that digitizing the supply chain through blockchain technology could save up to 20% of international maritime freight costs by simplifying commercial documentation, reducing fraud risks, and shortening transport times.
The Impact of Blockchain on Retail
The retail and grocery industries can also reap the benefits of blockchain technology, and they are already starting to do so. Retail giants like Walmart are implementing blockchain to track products, purchases, and customer information. Other industry leaders such as Nestlé, Unilever, and Kroger are conducting tests to explore blockchain’s applicability to their businesses. These actors understand the potential of blockchain for their operations, particularly in terms of security (through cryptography), speed, and transparency. Dr. Reshma Kamath, a blockchain specialist, explains that blockchain enables end-to-end tracking in the retail supply chain, from source to the final consumer.
By digitally tracking the entire logistics chain, blockchain enables the industry to collect and connect important product life cycle information. The advantages include traceability and security of food, product quality assurance, waste reduction, and minimized losses.
The Impact of Blockchain on E-commerce
The e-commerce sector has always faced major challenges, including payment processing, supply chain management, data security, marketplace transparency, and ensuring customer and supplier satisfaction. Solving all these problems simultaneously is no easy feat, but with blockchain technology, it is now possible.
Using blockchain’s peer-to-peer approach, payment costs can be reduced since there is no need for intermediaries. Payment procedures are significantly streamlined, and security is enhanced. This significantly improves the user experience, resulting in higher customer retention rates and loyalty. In terms of supply chain management, blockchain simplifies the purchasing process for e-commerce companies. Through traceability, they can confidently track their purchases at every stage. Additionally, data security has always been a concern in the e-commerce sector, as user data is stored on servers vulnerable to cyber attacks. Blockchain’s decentralized platform can address this issue by decentralizing user data, making it almost invulnerable to attacks.
Is blockchain revolutionizing commerce? Considering the numerous changes it brings, it’s safe to say that it certainly is!
