Applications and Use Cases

Blockchain Early Adopters Will Likely Include Finance, Logistics, Utilities

April 03, 2018

Financial services, logistics, and utilities will likely be the early adopters of blockchain technology.  These sectors are commonly mentioned by blockchain solution providers like IBM and others.  In some cases, organizations in these verticals are already helping move blockchain forward.

“Last year, when we looked at the top digital business trends for 2017, we predicted that centralized transaction models would come under attack.  We were spot on,” says Dimension Data CTO Ettienne Reinecke.  “In the financial services sector, we’ve seen the U.S. and European capital markets moving onto blockchain platforms, and similar activity in markets such as Japan.  Considering how conservative and compliance-focused this sector is, that’s quite remarkable.”

Deloitte reports that the Hong Kong Monetary Authority has studied and worked on blockchain.  It has published a white paper, and developed a blockchain proof of concept.

Meanwhile, it notes, JP Morgan Chase developed a distributed ledger and smart contracts platform called Quorum.  The platform launched last year and is still a work in progress, but it does illustrate that major financial institutions are keenly interested in this thing called blockchain.  It presents both an opportunity and a threat for the big financial firms.

Blockchain also has an obvious play in the logistics sector.  It offers the potential for shipping to become much more efficient.

Recognizing this potential, IBM has aligned with shipping giant Maersk to form a blockchain-focused joint venture.  But this isn’t just an IBM engagement with Maersk.  The companies aim to use blockchain to help the entire shipping industry reduce friction.

“You know how FedEx enables consumers to track their packages?  Well, an analog to that doesn’t exist for companies that ship goods today,” says Ramesh Gopinath.

Sure, organizations can use connected sensors to track containers, says IBM’s vice president of blockchain.  But that only happens in select cases and for piece parts of a journey, Gopinath says.  Plus, there’s no standard documentation for shipping, so a port in China needs different paperwork than one in the U.S., for example.

Blockchain is attractive because it provides end-to-end tracking.  It securely digitizes and automates the required documentation needed at every step along the way.  If U.S. port officials need the history on a container before loading it onto a ship, for instance, they can quickly and easily locate it.

The JV expects to deliver this offering via a software-as-a-service model.  This platform, and third-party applications based on it, could do more than simple tracking, Gopinath adds.  Ports could also use the solution to optimize their operations.  Customs officials could employ it to do security checks on containers.

“This new company marks a milestone in our strategic efforts to drive the digitization of global trade,” says Vincent Clerc, chief commercial officer at Maersk and future chairman of the board of the new joint venture.  “The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit.”

Deloitte says that utilities in North America and Europe are exploring the use of blockchain to enable the trade energy futures and manage billing at electric vehicle charging stations.

As I reported in January, blockchain could also disrupt the advertising, entertainment, human resources, marketing, and retail spaces.

Gartner expects blockchain to bring $176 billion in added value to business by 2025.  Deloitte expects to see more proof of concept activities around blockchain starting next summer, but the company also seems to suggest that, for blockchain to meet its potential, standardization is required.  The Hyperledger Foundation is among the groups working to define blockchain and protocols around it.

To learn more about blockchain, join TMC and friends at The Blockchain Event. The gathering is slated for May 16-17 in Las Vegas.

Edited by Erik Linask



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