The use of blockchain in business has been gaining momentum over the past few years, most notably in vital processes such as financial transactions, cryptocurrencies, manufacturing, supply chain management, and many others. When the pandemic emerged, however, that momentum slowed to a crawl, at least temporarily. Companies were forced to shelve technology projects as they sought to keep business operations afloat.
But there has been a silver lining — the value of blockchain was amplified during the pandemic when it illustrated how interconnected the world is and how fragile companies’ supply chains can become. Look no further than the spike in demand for vital goods such as personal protective equipment and testing kits at the beginning of the pandemic. Lockdowns served to accelerate digital transformation across a range of industries, particularly shipping companies who began moving to blockchain-based platforms and tools to facilitate better supply chain communication and transactions.
Blockchain Trends — The Evolving Role of the Technology
In simple terms, a blockchain is an append-only transaction ledger. New information can be written onto it, but all of the previous information stored in blocks cannot be edited or adjusted in any way. Cryptography links new content to each block before it, so any changes in a previous block invalidate all the blocks after it. This serves to make appending data decentralized so no single entity controls the information, and because it’s publicly published, anyone can view and verify it.
The benefit for industries that rely on supply chains is that the distributed ledger can reduce operational costs by removing intermediaries and administrative effort of keeping records and reconciling transactions. Getting rid of the “middleman” makes it much easier for companies to trace products and transactions back to their origin. During the pandemic, companies began to rely more on alternative digital means to track products and shipments that were reliable and helped them keep costs down.
Other interesting examples of blockchain trends and the value it is providing during the pandemic include:
- Support for digital passports that can prove that someone has been vaccinated for Covid-19 and their immunity status
- Improving clinical trial data management and disseminating public health data more accurately to minimize the potential for disinformation
- The potential for government stimulus money to get to recipients faster, more securely, and at a lower cost than checks and direct deposits
Blockchain Trends — Impact on Small and Midsize Enterprises
Small and midsize businesses (SMBs) have been hit hard by the pandemic, including their ability to conduct consistent business on smaller budgets and secure financing. Deloitte reported that adopting digital ledger technology can provide long-term solutions to a wide range of SMB problems by better leveraging the data collected in the SMB ecosystem. Blockchain is able to help these companies:
- Speed overseas payments by using stable coins and central bank digital currencies (digitized version of fiat currencies of central banks) to help shorten settlement times.
- Conduct cross-border remittance in just a day, a process that can sometimes take up to two weeks.
- Improve data transparency and lower risk for banks, which helps lower the cost for SMBs to get financing and insurance coverage.
- Identify fraud with purchase orders and invoices by accurately matching bills from logistics companies.
- Remove error correction time for transactions so that SMBs can keep doing business without worrying about liquidity, funding, or losing supplier discounts.
- Raise loan approval rates by utilizing higher quality information in credit decision-making models.
Blockchain Trends — Driving Innovation in Manufacturing
As tough as the pandemic has been on companies and individuals, it has forced them to become more innovative to survive and thrive. Harvard Business Review recently featured a case study of Colonel James Allen Regenor, USAF (ret), who since 2013 had been building a blockchain-powered platform for buying and selling 3D printed parts and instructions, as well as other components that get scanned with unique identifiers to help track them. The purpose of the platform was to enable a decentralized process for manufacturing, printing, and ordering parts for things like medical devices.
The role of blockchain was to ensure that design and printing instructions were tamper-proof. When the pandemic emerged, there was a great need to help battle Covid-19 by building vital medical devices and providing parts. After developing a global partner network, Regenor was awarded a contract by the Pentagon to convert sleep apnea machines into ventilators. By using his designs — streamlined by blockchain technology — converted ventilators could be created at one-tenth the cost of a new one.
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Blockchain Adoption Will Continue to Spike
While it’s clear that blockchain has found great success in the wake of the pandemic, it is also serving as a valuable testing ground for various industries moving forward. Technologists will continue to build their blockchain skills to help their companies become more innovative and efficient in a rapidly changing world.