Orixes software platform is built using blockchain technology. Many people have heard of blockchain as the technology behind many cryptocurrencies, but at Orixe we have focused on using the technology for other applications. In this blogpost we will try to demystify how blockchain works and highlight some use-cases to show how technology can be applied to supply chains.
In short, blockchain is a form of shared, distributed, and immutable, data storage. The blockchain records transactions and tracks data across an entire network of users. When a transaction is made between users connected to the blockchain, the transaction is recorded as a “block” of data in a shared ledger. Every block of data is assigned a unique mathematical number, or a # (hash). This number is generated from the underlying information stored in the block. Each new block needs to be connected to the one recorded before it, by referring to the hash of older blocks preceding it. This creates a chain of blocks containing data, or a blockchain. If a newly recorded block does not properly refer to older ones, the entire “chain” of blocks is invalidated, and the new block cannot be added to the chain.
The way the blockchain works means that each new block of data that is verified cannot be changed after-the-fact. If any changes are made to the information of the block, it will change the generated hash, which will invalidate the entire chain after it. This means that the information stored in the blockchain cannot be tampered with or edited, providing insurance against hacking, corruption of data, or fraud. Because of this blockchain ensures that all data is 100% secure and immutable. Blockchain technology can be applied to any kind of data, it does not matter what is stored in a block, making it applicable to multiple use-cases.
By storing the transaction of goods between users in the supply chain, it becomes possible to keep a record of critical information about the products being traded. For example, by recording the point of origin of an asset, blockchain can be used to verify the Country of Origin of goods like diamonds or coffee. This can also be used to track data like lot number, product ID, or material composition. Recording this data can help as a powerful insurance against counterfeit goods, as non-compliant goods and fraudulent suppliers are easily revealed.
Blockchain technology can be connected to sensors for a wide range of applications within logistics. Notably, to ensure the quality and proper treatment of temperature sensitive goods, data from temperature sensors in shipping containers could be connected to send data to the blockchain, in order to log the temperature range that products have been subjected to. This can help ensure quality and compliance for the party receiving goods.
The blockchain can also be used to share and store certifications, either on a business or product level. By uploading certifications and attaching these to product transactions, it becomes easy to verify quality and compliance. By uploading certifications to a supplier profile or similar, buyers gain a greater insight into the qualifications of potential suppliers. While paper certifications might be easy to fake, digital versions are harder to counterfeit, and the blockchain might even be connected to databases in order to verify the legitimacy of uploaded certificates.
Blockchain can be an incredibly powerful tool for supply chain management, without having anything to do with cryptocurrency. Since it does not matter what kind of data is stored in a block, it allows users to exchange and validate data of any kind. This can be important both for sourcing, QA, and logistics, and reduces overhead and transaction costs, as it facilitates automation and paperless transactions. Keeping a record of data that is immutable protects the supply chain against cybersecurity threats, as hacking and corruption of data becomes decidedly difficult.
The Orixe platform is built on a hybrid solution that combines database and blockchain. This promotes low energy consumption and efficiency, without jeopardizing the benefits of blockchain. Our software allows for full verification of data and total transparency, while keeping sensitive business information hidden. Read more about what we offer here.