Blockchain and IoT work better together — and they’re poised to fix some of the biggest problems facing companies in the era of digital transformation.
Blockchain’s Potential for Easing IoT Adoption
Last year, companies were expected to spend more than $1 trillion on digital transformation for the first time, following a roughly 18% increase in spending from 2018 to 2019. We can expect that upward trajectory to continue increasing sharply in coming years as well. A new generation of technology is here, and we’re quickly approaching a point where everyone needs a digital transformation strategy to avoid being left behind.
It’s safe to put IoT devices high on the list of technologies companies should be investing in, as these internet-connected devices play a huge role in a digital transformation strategy. Why? Because they bring the analog online, whether it’s critical industrial equipment or medical devices. If digital transformation strives to create a seamless digital link between everything, IoT provides ever-important inputs to ensure transparency throughout.
To put this into perspective, consider an airport. It’s filled with high-tech devices: passport scanners, X-rays, magnetometers, fingerprint kiosks, and (during pandemics) infrared thermometers. Each of these devices is individually important, but only by working together can they effectively secure an airport. IoT makes that possible by linking each device into a broader security platform that can quickly identify and respond to threats — whether that’s a virus outbreak, mounting security concern, or something completely different.
IoT adoption might be crucial for a digital transformation strategy, but it’s not the only crucial element. In fact, without blockchain, there are legitimate questions about whether IoT can live up to its potential.
How Blockchain Safeguards IoT
A recent Gartner survey demonstrated that most companies adopting IoT are alsoadopting blockchain. This led one Gartner vice president to comment that “the integration of IoT and blockchain networks is a sweet spot for digital transformation and innovation.” Apparently so, given that the same survey showed 86% of blockchain adopters are using the technologies together in projects designed around their complementary strengths.
The strength of IoT is to extract data from far-flung devices and link these devices into information networks, but trust and security must also be considered. Connected devices are vulnerable to all manner of cyber attacks, and because they have few if any built-in security protections, they’re easy targets.
There are two main avenues nefarious actors will take when trying to gain access through IoT devices. First, hackers will often hijack these tools to participate in distributed denial-of-service (or DDoS) attacks where they bombard a server. Because IoT devices are relatively easy to commandeer, they’re generally easy to ensnare in DDoS attacks. Second, IoT devices create large amounts of data and network activity, and due to high volumes of both, it’s difficult to pinpoint, stop, or assess attacks. Security concerns related to IoT have held back its large-scale adoption, and for good reason: Imagine what would happen if airport security devices came under attack.
This is where blockchain comes in. Savvy companies are pairing their connected devices with blockchain because it offers a uniquely applicable way to address IoT’s privacy and security concerns. There are a few reasons for this: Blockchain is a decentralized database that has no single owner, and the data within can only be added to (not changed). In essence, it becomes an immutable and transparent record. The extensive use of cryptography makes blockchain databases even more private and secure from outside threats. At the same time, consistent logic applied within the blockchain creates trust between the participants.
So how would blockchain and IoT work together? One use case for blockchain might involve quelling fraud and counterfeiting. Blockchains could be loaded with detailed product information for each legitimate product produced by manufacturers. Customers in stores could then scan a product tag to authenticate whether it came directly from the brand manufacturer. At purchase, that buyer could also be cryptographically logged into the blockchain to complete the chain of ownership
Thanks to blockchain and IoT, brands could make a real dent in the rising number of counterfeit goods flooding the market. They could also transform their relationship with customers, given that they have a detailed transaction history for every product sold. This is just one example of how blockchain is used in business, but it illustrates why blockchain and IoT work better together — and how they’re poised to fix some of the biggest problems facing companies in the era of digital transformation.
The business value of blockchain is too significant for businesses to ignore — and if you haven’t already, it’s time to consider a framework. When you’re ready to discuss how blockchain fits into your own digital transformation strategy, contact Chainyard.
Understanding Digital Transformation and Blockchain’s Applications
Digital transformation was already a hot topic before 2020.
When the COVID-19 pandemic hit and companies depended on technology to adapt, digital transformation took on even more importance. It went from being an abstract idea or long-term goal to something that companies needed to make major strides toward immediately. Many months later, the transformation plan (or transformation itself) should be well underway.
So what should this plan include? That depends on the digital transformation strategy a company adopts. Each one will mix and match different hardware, software, cloud, and tech-driven capabilities to serve its own business interests. In most cases, though, digital transformation will involve a panoply of emergent technologies that have, in large part, either come online or reached maturity just in the 21st century: Advanced robotics, artificial intelligence, internet-connected devices, 3D printing, 5G wireless, and autonomous vehicles are some of the best-known examples.
Global spending on technologies and processes related to digital transformation topped $1 trillion in 2020 after growing nearly 18% in 2019. Spending has been and will be robust now that so many solutions that looked promising in the past are becoming commercially viable on a large scale. Also driving digital transformation is the never-ending need to improve operational efficiency — something the latest generation of technology excels at. Finally, the fact that early adopters have proven the value of tech like AI or IoT makes holdouts willing to try new things.
Companies serious about using digital transformation to their advantage should consider blockchain’s use cases. Although it’s not as flashy as other technologies (such as an autonomous robot), blockchain applications have the potential to transform industries more than any other solution. In doing so, they could also help companies that currently lag behind the competition and struggle to gain market share leap ahead of others. This highlights the extent to which digital transformation driven by blockchain isn’t just a tech initiative — it’s at the core of the business model and strategy.
Blockchain technology has applications in almost any business, but there are certain environments where a shared ledger is particularly advantageous. Some startups are building forward-thinking products and services around blockchain applications, often using tokenization, decentralized finance, and identity. Other more mature companies are discovering enterprise use cases for blockchain that help organizations become more efficient, productive, agile, or insightful.Given what blockchain applications can and will do, it’s no surprise that a majority of respondents to a Deloitte survey (55%) consider blockchain a top priority. More surprising is that 83% of respondents worried their company would lose competitive advantage if it didn’t adopt blockchain. The case for this technology is compelling, especially in the era of digital transformation. The lingering question for many organizations is how to make use of this technology for real-world applications, and the remainder of this post provides some guidance.
Blockchain Use Cases
Blockchain ledgers come in many forms and accomplish countless objectives. In fact, their flexibility explains why questions still linger about what, exactly, blockchain does. Below, we map out a few blockchain use cases that illustrate the deep impact it can and will have on adopters.
Digitizing Asset Management
Companies like IBM own countless hardware and software assets that power offices around the world. However, tracking these assets across global supply chains and through their entire life cycle (from manufacturing to deployment and finally to disposal) represents a seemingly insurmountable challenge that countless producers in technology and other industries struggle with.
However, tracking and managing them at scale throughout their entire life cycle is no longer a distant possibility — it’s now a reality. And with the advent of blockchain asset management tools, it’s not even particularly challenging.
So how does all of this work?
Put simply, every asset receives an entry in the blockchain ledger that’s updated whenever the asset moves elsewhere. The ledger becomes a single source of truth for everything relevant to asset management, whether that’s an item’s location, condition, or destination. Supply chain partners also contribute to these decentralized blockchain ledgers, as it improves their own product management efforts.
In general, digital transformation strives to improve efficiency by using tech to eliminate friction points and information deficits. When it comes to asset management, blockchain applications accomplish exactly that by integrating everything and everyone in one place. Those applications rely on four primary components — a shared ledger, peer consensus, smart contracts, and privacy — to create an automatic paper trail behind assets that everyone trusts.
IBM is already experimenting with blockchain’s applications in supply chain management — as will many others. As the supply chain undergoes digital transformation, anticipate blockchains (and the expectation to participate in them) to become the standard.
Streamlining Payments and Invoicing
We live in a world of electronic payments, but a startling 80% of companies still pay invoices with paper checks. Of course, an analog payment process slows things down for all involved and leads to more errors along the way. Still, old habits die hard, and many companies still feel more confident dealing with paper checks than they do relying on the various digital B2B payment tools available to them.
A blockchain ledger could finally push things in the other direction. With a shared ledger, two sets of payment records condense into one: Eliminating the back-and-forth part of the payment process with blockchain helped one company reduce its invoice rejection rate from 9% to 0.5%, for example.
In another instance, global bank HSBC leveraged the efficiency of blockchain ledgers to process upwards of 3 million foreign exchange transactions in one year. A vast accounts payable and receivable industry exists to handle payments, and blockchain could support, supplement, or replace much of the work that accounting departments handle, all while improving the results. That’s exactly what digital transformation strives to do.
In addition to automating the core mechanics of the payments process, blockchain ledgers can keep the process itself from breaking down. For example, when a shipment arrives incomplete, incorrect, or damaged, blockchain can quickly amend the invoice in a way that both parties agree upon. The involved parties don’t spend weeks or months resolving a payment dispute — because a blockchain ledger does the same thing instantly (and largely automatically). Given how perfectly suited blockchain is for digital B2B payments, digital transformation around payments appears to be just around the corner.
Improving Supply Chain Management
Global supply chains create as many issues and inefficiencies as they solve. Relying on hundreds or thousands of partners and suppliers located around the world leads to frequent breakdowns in a supply chain that’s supposed to run like clockwork. Blockchain technology prevents supply chain issues in many cases and minimizes damage when it can’t. In the same way that it’s the ideal solution for a vast, complex payment system, blockchain’s supply chain management promises to turn persistent supply chain issues into rarities.
It does so by eliminating the paperwork that’s still common in supply chain management. Instead of stakeholders scribbling down figures, soliciting signatures, and shuffling around documents, everything happens inside a shared ledger. Using blockchain for supply chain transparency yields such excellent results that the participants share (and trust) the same information instead of keeping independent records multiple times over. Disputes, delays, and defective products have fewer consequences and a faster path to resolution when a blockchain ledger is embedded into the core of the process.
On a wider scale, producers that can harness blockchain in their supply chain management have a powerful forecasting and fulfillment tool at their disposal. Shared information between suppliers, producers, and purchasers leads to better demand forecasts. Likewise, it streamlines logistics: All partners know what arrived when and where, as well as the condition it’s in.The need for privacy and security have always been obstacles in a global supply chain that runs on partnerships and predictability. Blockchain technology bridges that gap by making important nonsensitive information visible but immutable, all while keeping sensitive data private. It’s almost like having an independent auditor who tracks everything happening in the supply chain objectively, automatically, and without stopping. In this way, stakeholders get a transparent view of what’s going on and can align their efforts for shared benefit.
How to Implement Blockchain Into Your Digital Strategy
Like any other process change,implementing blockchain in supply chains, payments, or any other aspect of operations takes a clear strategy. Advantageous as blockchain might be, a tool is only as strong as the person using it and the purpose it’s carrying out. Blockchain adoption could be the highlight of digital transformation — but without proper planning, it risks under delivering. With that in mind, consider these points in your blockchain implementation quest:
Three examples of areas where blockchain is an obvious choice for consideration are:
There are also some areas where blockchain isn’t a good fit. Two examples include:
Act Boldly With Blockchain
It’s hard to overstate the potential of blockchain. After all, it’s something with the potential to improve sweeping aspects of operations while creating opportunities to revolutionize the business model and strategy from the core of the organization outward. If the digital transformation road map is about turning companies into something totally new and definitively better, blockchain can make a significant impact.
It’s no wonder why Gartner thinks blockchain will create over $176 billion in business value by 2025 before skyrocketing to $3.1 trillion by 2030. And the blockchain use cases outlined above are hardly the only areas where distributed ledgers will elevate expectations; areas such as compliance, cybersecurity, and data-sharing will improve as well, to name just a few. Given what blockchain can do, it’s easy to see why it’s a critical component of any robust digital transformation framework.
Early adopters will reap the rewards of blockchain sooner and see them multiply over time. Holdouts won’t just miss the benefits of blockchain — they’ll also inhibit their own digital transformation efforts in many cases. Put yourself at the front of the pack by leveraging blockchain technologies early and to the fullest extent possible.
Want to learn more about ensuring a viable, realistic, and rewarding blockchain implementation within your own organization? Download our free whitepaper to get started.
The COVID-19 virus is here to stay. This is the new reality. And yet businesses have no clear, reliable path to fully reopen their places of work. As quarantine restrictions loosen, most industries continue to miss out on revenue while they cannot operate at full capacity. Just a single case of a person carrying the coronavirus back to the workplace can result in other infections, which causes facility shutdowns and increases employee anxiety.
People should get back to work, but a major decision looms on how to assuredly check if returning employees are infectious or not. The CDC recommends taking an employee’s temperature and asking about symptoms, but these are far from foolproof. A person can be asymptomatic, shedding as much virus as someone who has symptoms2, or their symptom descriptions may be inaccurate.
Companies need solutions that make them and their employees feel comfortable about restarting work again. These should incorporate continuous health monitoring to validate each employee does not have COVID-19 prior to entering the workplace, and contact tracing to inform and quarantine anyone who may have been in the presence of an infected employee. Solutions must confirm the person‘s identity and verify the person’s location and recent negative test results, while also being quick and easy to present
This whitepaper is evaluating three technologies Blockchain, digital identity & verifiable credentials and smart phone to create a verifiable credential platform solution to hold and verify any credentials including COVID test report or vaccination report. The employee can prove their COVID-19 status to an employer or other requesting entity by presenting their test credential as a QR Code.
Blockchain technology is emerging as a key driver of growth. As a part of strategic planning, enterprises are evaluating industry-specific blockchain use cases including track & trace, real-time visibility, compliance simplification, digital identity, dispute resolution, reducing intermediaries, secure data sharing. While evaluating use cases, enterprises are still lacking tools to answer the most common questions – what is the business value of the blockchain use case? What would be the short,medium, and long-term value of implementing blockchain use cases?
This blockchain business value articulation framework aims to help organizations identify the business value that blockchain technology is enabling in their use-cases for all stakeholders in the ecosystem. Understanding the value for all stakeholders along the roadmap of the use case makes it easier for organizations to map the value of the investment to the roadmap that is enabled by a blockchain investment.
This framework helps organizations identify the business value that blockchain technology is enabling in their use-cases for stakeholders in the ecosystem. Understanding the value for all of the stakeholders makes it easier for organizations to map the value of the investment to the roadmap.
This White Paper shows how blockchain innovations are already proving their vast potential to change the way business works. Just like cloud computing before it, blockchain is a technology innovation that will facilitate shifts to business models. Blockchain is the enabler and catalyst for the next generation, and it’s poised to transform the architecture of B2B processes.
Enterprises that ignore blockchain might find themselves struggling to keep up as competitors work together and adopt more efficient blockchain-based models. To stay ahead of competitors, strategy and innovation executives should keep blockchain top of mind and develop a game plan. Putting blockchain on the agenda can mean realizing these benefits:
The paper includes practical examples of how blockchain is transforming businesses and finishes with three strategies on how to explore blockchain.
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