I interviewed Julio Franca who discussed Blockchain and Internet of Things.
Blockchain and Internet of Things
Other ambitious ideas come from using blockchain and IoT. One suggestion is for smart contracts to manage rentals of driverless cars. A smart contract could check for rental payments. If payment has not been made or simply at the end of the rental contract, the smart contract could lock the car and tell it to drive itself back to the renter.
Challenges to Be Met
Blockchain has its challenges too. Enterprises that want to harness blockchain power for their supply chain will need to watch out for the following.
Ecosystem still in progress
The first telephone was useless until the second one arrived. In time the phone spread all over the world and now we can’t do without it. The situation is similar for blockchain and companies that want to do business with specific partners. Those partners will need to buy into blockchain as well. For example, Tomcar mentioned above only uses bitcoin payments for about 2% of the parts it buys. However, niche uses of blockchain are on the rise. It may be just a matter of time until businesses “join the dots” for widespread acceptance.
Bitcoin is an easy way to start using blockchain. The problem is that bitcoin exchange rates with other currencies can change rapidly. Payment terms must be short enough or flexible enough to be able to cash in bitcoin and recover the value expected. Bitcoin and other cryptocurrencies (Ether for example for the Ethereum platform) are also volatile in another sense. If you lose the digital key (passcode) to your cryptocurrency reserve, there is no other way of getting it back.
Technology and knowhow
Blockchain programming takes a mix of software skills. It also helps to understand economies and businesses, especially your business. You may have to train staff or hire new people with these skills. You could also outsource your blockchain development to a third party. The best choice for you will depend on your current situation and future aspirations.
Blockchain was started by people who wanted to decentralise applications and operations. They wanted to make dependency on centralised entities like banks optional instead of obligatory. This is a new way of thinking. Don’t be surprised if it takes you or your colleagues a little time to shed your mental shackles and get into the swing of the blockchain movement.
Blockchain can transform supply chains, industries and ecosystems. Interestingly, even organisations like banks, who would seem to be losing out, can see opportunities to use blockchain to streamline their own business. In-depth transformation of supply chains will not happen overnight. However, supply chains can already start using blockchain for small portions of their operations. Smart contracts can help eliminate costly delays and waste currently due to manual handling of paperwork. From there, the door is then open to smarter, faster, more secure supply chain from one end to the other.
About Julio Franca
Director at Spin Consulting