Blockchain technology beyond Bitcoin

Blockchain technology is usually associated with Bitcoin and other cryptocurrencies. However, its use goes far beyond that, auguring that it will cause a radical change in the business models of the majority of economic sectors. Thus, logistics is one of the areas in which blockchain technology is expected to lead to more profound changes. How will it impact this particular sector? We review it below.

Blockchain is the information system shared between different computers (nodes) of a P2P (peer-to-peer) network. It presents two main characteristics. Firstly, it’s a distributed database in which every node has a complete copy of the information and the same privileges as the rest regarding this information. Secondly, it’s a secure system: the introduced data is immutable (can’t be modified) and all the transactions are registered. This facilitates the collaboration and consensus between all of the network’s participants, avoiding the need of third parties to arbitrate and guarantee the veracity of the information.

The system’s main advantage is that it streamlines the transactions, which can lead to lower management costs. Blockchain also allows storing the so-called Smart Contracts, contracts that adopt the form of stand-alone software programs that run automatically in all the nodes of a network allowing all of the members to simultaneously verify that the terms of an agreement are met.

Security in the IoT

With the so-called Internet of Things (IoT), objects equipped with sensors and computing devices can provide information about their status continuously and autonomously: they are “connected objects”. The blockchain technology can also facilitate the communication between these objects and the systems in which they are used, improving their management security.

Logistics and transport of goods are areas in which transactions involve numerous diverse entities and that generate an important flow of information and money. The blockchain technology will connect the parties involved in a smooth and transparent manner. Importers, exporters, logistics companies, authorities, banks and insurance companies connected in a blockchain network will be able to share information securely and establish smart contracts reducing time, costs and litigations.

Therefore, it’s not surprising that the interest in these technologies is growing rapidly. There are already international goods transport pilot projects in airports and seaports which apply blockchain technology and IoT to improve traceability of the goods and streamline agreements. The implementation of these systems will entail profound changes in the logistics management models, changes that won’t be applied without reluctance or difficulty. However, it’s better to be prepared: blockhain is here to stay.