Since it first emerged more than a decade ago, blockchain technology has become a major buzzword that industries are exploring to improve their operations.
Blockchain is a distributed-ledger technology that records transactions across multiple computers in a way that makes it nearly impossible to alter transaction data, storing data in blocks that are linked together in a chain. Initially created as the technology behind the first cryptocurrency, its applications have since expanded far beyond digital currencies.
As the amount of data and information being gathered and shared each day continues to expand, blockchain will play a key role going forward in many industries, including businesses who are part of Industry 4.0 and the smart manufacturing boom.
The goal, of course, is to maintain security and integrity of operations, while using blockchain technology to improve and streamline overall operations. One major area where blockchain can be embraced is in the realm of supply chain management, an area which was very much in the news over the past few years due to pandemic impacts on supply chains.
Blockchain helps enable end-to-end transparency and traceability of products. Forward-looking companies in the automotive realm, from OEMs to suppliers, are using the latest blockchain technology to more effectively track items as they move through supply chains, allowing for better communication between all parties involved.
The Internet of Things (IoT) and its associated data storage is an essential element of Industry 4.0, but it also can create security risks. One way to help solve this issue is through the use of blockchain technology and its increased security for password and data protection on a decentralized network that is more difficult to compromise. And financially, it can cost less to use blockchain for data storage. Blockchain data is also immutable, meaning it can’t be deleted or modified.
While blockchain may not be the answer for every manufacturer or all industries, many key industry leaders are embracing it, in part due to the improved security vs. cloud-based solutions.
For example, Walmart, one of the nation’s leaders in supply chain management, uses blockchain to create an automated process for handling invoices and payments of its third-party freight carriers. Real-time access to data via blockchain can greatly improve efficiency of operations. Beyond finance, blockchain technology could also be used to streamline other sensitive documents such as medical records.
One of the biggest X-factors that will determine the level of adoption that blockchain technology will see is its connection to cryptocurrencies, such as Bitcoin and Ethereum, and the ongoing discussion about regulation of the crypto and blockchain industries.
This technology is here to stay, and a vigorous debate is taking place in our nation’s capital on how to properly regulate the industry going forward.
The good news is that all sides agree that some level of regulation is needed to maintain the safety of blockchain technology — and that a properly regulated system is a better alternative to an unregulated environment.
While a few high-profile scandals related to blockchain/crypto firms have absorbed most of the headlines in the past year, behind the scenes the technology Is working to the benefit of many businesses and individuals throughout the U.S. and globally.
The goal of these discussions among our leaders in Washington should be to find a solution that both addresses the concerns of those who doubt the integrity of the blockchain system, while still marching forward with the technological advances in blockchain that will help businesses grow and improve operations in the years to come.
Hard-working business leaders have another excellent tool in their box with blockchain, and the path forward will be one worth watching for everyone who plays a role in Industry 4.0.
As long as any regulations put in place ensure that there are clear rules protecting entrepreneurs from negative impacts, the future of blockchain is bright.
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