IBM uses blockchain to track supply chains and verify transactions across industries. Walmart cut food tracing time from seven days to 2.2 seconds using IBM Food Trust. IBM's system runs on Hyperledger Fabric, a permissioned blockchain that handles hundreds of known participants without proof-of-work mining.
What happens when one of the world's largest tech giants starts leveraging the power of blockchain? We are talking about a company with over 350,000 employees and operations running in 177 different countries. In 2018 alone, this company registered $79.5 billion of revenue. IBM, also known as Big Blue, is using blockchain as a tool to disrupt business models across multiple industries, from shipping companies to service providers to banks. We met with IBM blockchain representatives at Sibos in London who told us how Big Blue is using blockchain to radically change how businesses store, share and verify data. What does putting data on the blockchain mean for businesses?
Two things. If it's in the blockchain, if it's on a chain, that means that a, you can have trusted shared access. So think about you as a supplier. Perhaps if you're a producer or supplier, there's a supply chain there right now. You have many steps along a supply chain with a consumer being at the end of that. Think if you have trusted shared access, you don't have to make phone calls, look at emails and check and see where something is in the supply chain. You could all have access, trusted access, by just looking at it. And then when you saw that data and you had access, you'd know it was right.
A supply chain consists of all the processes for the creation and distribution of goods. Typically, these processes consist of hundreds of stages happening at different times in different parts of the globe and involving multiple entities. Thanks to its transparency and immutability, blockchain can keep track of all data involved in this process, making it easily accessible for all parties involved and minimizing the costs.
Interesting thing about blockchain, as we said, you know, it goes across industry, goes across geographies. You're going to see a lot, obviously, based on some of what I said, as a consumer, you're going to see it in financial services. Financial services was one of the first that took off. You see it in industrial any place where there's a lot of people process and paperwork. So that's probably most industries, right? So what we're seeing is more interesting is not which industry, but which industries come together. We think about one of them the production networks we're working on now project with the US fda. It's also tied to Merck, it's also tied to Walmart as a retailer, with IBM, KPMG as an advisory. I just went across multiple industries in one blockchain network.
In ancient times, supply chains were relatively simple since commerce was only Happening on a local level. Today it in the era of global commerce and growing connectivity, supply chains have grown increasingly complex.
That linear step has now become very dynamic, almost three dimensional because a supplier can also be a buyer. A buyer can then be a shipper. It all changes its path. So what you have instead of this step, step, step, it's actually three dimensional and you have this value that's in a sphere that says, look, I could be today a buyer of goods and then tomorrow the data that I have around those goods could bring value to the consumer, knowing that it is in fact the good it's supposed to be. I've consumed this much of it and here's how it's flowing through the supply chain. So that thought of changing the value of data has now changed how the ecosystem is evolving.
One of the main sectors IBM is focusing on is the food industry. IBM Food Trust is using the blockchain to track food products from their original source of all the way to the consumers, thus ensuring the freshness and safety of those products.
Think about the world's largest retailer, even the world's largest grocer, which is Walmart, when it used to take them seven days to trace and track something that could have a foodborne illness. And of course food is guilty until proven proven innocent. So they were throwing that food away for seven days, they were able to shrink that time to 2.2 seconds. I have to add that point too, but 2 seconds, 2 seconds on a blockchain. So think of what that changes. Where you had the luxury of seven days, but now it's only two seconds. So if you can do that across multiple industries and shrink that time frame and get information when you need it, think of what business models that could open up.
The IBM blockchain platform is built on Hyperledger fabric, an open source blockchain network hosted by the Linux foundation and designed to streamline business processes across multiple industries. Hyperledger fabric is a permissioned blockchain, which means all its components and members have precise identities and all transactions happen via validation checks. This is what makes Hyperledger very different from traditional blockchains, which are usually focused on anonymity and rely on computing power to validate blocks.
We don't mind, we don't spend extra energy, but this requires another technology that we put in place and another ways to protect from non honest participants, like Byzantine Faultorian's algorithms.
So if you're not mining and there's no proof of work, what does that do for the scalability of the network?
So the difference between mining scalability and the consensus algorithm we are using is actually that in consensus algorithms you can have much better throughput of transactions, so you can insert much more transactions. And that's why permissioned networks are much closer to transactional systems than proof of work networks. On the other hand, the usual amount of participants there is not like in Bitcoin where you have thousands or tens of thousands. You have much smaller scale, you know, let's say up to hundred of participants and they will order the transactions.
But the work IBM is doing with blockchain goes beyond supply chain. It expands to identity management, governance, trading and finance, and of course cross border payments.
That's what blockchain is delivering as a capability on the forefront. Then we think about all of the extra, guess what else depends on data IoT. So the Internet of things, if you're trying to make sure that that device is that device and it's saying how something's going through a process, it's using data as well. AI also is using data, automation using data. All of these things are now being empowered by this new catalyst of capability.
Which is blockchain Cointelegraph like Subscribe and Hodl. Sam.
