One of the most interesting, but mysterious and most misunderstood technologies in the digital realm are blockchain and bitcoin. Blockchain, specifically, is also the technology with the greatest potential to secure data and transactions that demand trust. Although they are related, separately and together they require quite a bit of space to adequately explain, so this time around, I’ll focus on a few aspects of blockchain and their possible implications for manufacturing.
Blockchain combines the openness of the Internet (unless/until Net Neutrality goes away) with the security of cryptography to give companies a faster way to verify vital information and establish trust without the need for third parties and other intermediaries. It was initially developed more than a decade ago to provide the technical underpinnings for Bitcoin, the cryptocurrency with which it is sometimes mistaken. As Pat Bakey, president of SAP Industries, noted, “Early horror stories about bitcoin, the most famous digital currency to use blockchain, prompted its mainstream dismissal as a dubious tool of the dark web.”
At its core however, blockchain is simply an open and secure method of recording transactions, just like a traditional ledger. Because blockchains establish trust, they provide a simple, paperless way to establish and track ownership of money, information, and objects by individuals, companies, and other organizations.
Blockchain: What’s In It For Manufacturers?
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value,” wrote Don and Alex Tapscott in their book, Blockchain Revolution.