Blockchain is more than your standard water cooler tech topic. Even if one doesn’t quite understand Blockchain, its impact will one day still be felt in everyday life. In fact, this decentralized, digital transaction recordkeeping technology made popular by the likes of Bitcoin and Ethereum can do far more than cryptocurrency. Blockchain will one day change the very character of international trade flows.
Blockchain as a Ledger
Blockchain technologies are decentralized transaction records, commonly described as a “ledger.” Independent nodes in a system validate the ledger, ensuring its legitimacy. The potential applications of Blockchain are only limited by the ability of the network system to handle information.
Blockchain security is relative to the size of the network. For this reason, in November of this year, the Australian government announced an initiative to put driver’s licenses on Blockchain. Large data sets, like driver’s license information, is ideal for the efficient application of this technology.
Blockchain and International Trade
Thanks to RFID chips and barcodes, it is commonplace for a company to know exactly where its products are along the supply chain at any point in time. From inventory management to product lifecycle management, even when product is long gone from the factory, manufacturers often know a lot more than one might expect.
Despite this wealth of data and the informatics potential it can provide manufacturers, data isn’t easily shareable between parties along the chain. Vendors and buyers who lack proprietary knowledge of the barcodes or RFIDs in question are often left pitching questions to their business partner’s shipping and receiving department for that info. Blockchain is poised to cut this inefficiency.
Validity and Shareability
Scale efficient and cost-effective, Blockchain is capable of improving even the largest enterprise’s data handling. Its nature as a self-validated, organic network of data means international trade actors are able to share their Blockchain-backed data with others, should they so choose. In a well-constructed Blockchain network, the recipients of data can rest assured in its legitimacy.
With both validity and shareability, Blockchain-enabled supply chains can add transparency to a company’s operations—a boon for both auditors and a company’s business partners alike.
In a network of Blockchain networks, where companies share their secure proprietary data with others, finding the detailed supply chain history of a product becomes a simple task. In a world where slave and child labor, counterfeiting and trade sanctions realities all challenge the moral and legal conscience of multinationals, Blockchain can be a force for good.
For international trade, Blockchain will become a value-adding technology. It is said of big data that there is more information than people know what to do with, but in the case of international trade, this may just be the technology needed to solve a critical lack of knowledge in the global economy.