Imagine that you and everybody in your organization has completely accurate, detailed and real-time information about every transaction you conduct with your customers and suppliers as well as all the data collected by the sensors on your machinery and equipment. Imagine further that it is the same information at every moment that every one of your customers, suppliers and business partners has. Finally, imagine that the information is both incorruptible and secure from hackers and cybercriminals.
Sound too good to be true? Well, that’s the promise that proponents and early adopters see in a new and burgeoning approach to managing and sharing digital information called blockchain. It’s called “distributed ledger technology,” a data base architecture invented in 2008 to support the creation of so-called unregulated “crypto-currencies” like Bitcoin. The good news is that blockchain is almost infinitely adaptable to transfers of any kind of information, so, no matter what business you’re in, sooner or later it’s coming to you.
How it works
A blockchain is a virtual database consisting of “pages” or blocks of encrypted and time-stamped entries of data supplied by authorized network users. The latest page reflects the new entry plus every one before it, all linked (as in a chain) by encrypted user keys, and constitutes the current ledger in its entirety. Unlike databases that reside in a centralized computer, a blockchain is a real-time document that resides on every server belonging to a member of the network.
These features yield a unique array of benefits. A blockchain is programmed so that the entries, after they’re validated by the network’s members, are permanent, making the ledger inalterable and, so, reliable enough to be audited. Its encrypted data and user access keys, plus the fact that the ledger exists in many servers, yields unparalleled security against hackers.
In addition, transactions executed in a Blockchain are typically faster than those in a centralized computer, and are completely transparent to all network members. Another plus is that blockchain can save network members money. Because it’s not centralized, no one party bears the burden and expense of maintaining the database: blockchain eliminates the need for expensive backup servers and remote storage.
Applications in the automotive world
Developers note that blockchain is extremely versatile, with a huge variety of potential applications beyond payment processing and money transfers. These include maintaining patient medical records, tracing the origin of foods that cause illnesses, executing and documenting stock market trades, running retail loyalty rewards programs, supporting consumer digital identification systems, operating digital voting, and taking the paper out of the real estates and insurance industries, to name a few.
Of course, as the CEO of a vehicle fleet services company, I’m more familiar with blockchain’s potential for changing the automotive world. Here, the big story is making connected cars, particularly automated vehicles, a reality. As one futurist at Ignite, a software outsourcing firm, put it:
“The connected car will soon be the blockchain connected car. Although the automotive industry has been slow to realize the value of blockchain technology, you can bet it will ultimately be the de facto means of securing connected car data. From cardless fuel purchases to the infotainment system to software updates for critical vehicle systems, distributed ledger technology will increasingly be utilized to keep connected drivers and their sensitive information safe.”
Apart from helping to make connected vehicles secure from cybercriminals, there are a host of other potential applications for blockchain in the fleet industry. I’ll just mention a few:
• Even before self-driving vehicles enter fleets, blockchain can be used to enhance vehicle safety by enabling OEMs to rapidly pinpoint vehicles with faulty parts, an increasingly critical capability as more driver-assist safety systems become standard equipment.
• In terms of asset management, it could create a full history of every fleet vehicle, from its manufacture to its acquisition, equipment inventory, refueling, routine maintenance, and remarketing, creating a running tally of its precise total cost of ownership at any moment.
• Fleets and fleet management companies could use it manage their supply chains, from upfitters to fuel management companies and repair networks, tracking every transaction and evaluating their cost effectiveness and quality of services.
• Blockchain could be used to enable fleets of autonomous, electric vehicles to locate charging points that they have permission to use, and are billed for usage, with all data logged and recorded for analysis.
• In trucking, blockchain could increase the efficiency and transparency of the entire shipping process, including matching shippers with carriers more easily, streamlining payments, reducing the number of intermediaries and more.
Still in its infancy
Blockchain is still in its infancy, and there are applications in fleet, the automotive world and business in general yet to be discovered. Some observers say its impact will rival or even exceed that of Java, the computing language that revolutionized and now permeates the Internet. That may not happen for a number of years, as a 2018 Gartner survey of some 3,100 chief information officers around the world found that only one percent were investing in its development and use.
But to be sure, blockchain is coming. Worldwide spending on blockchain solutions is forecast to reach $11.7 billion in 2022, according to the market research firm International Data Corporation, growing by more than 70 percent each year. As Bloomberg Intelligence said in a report last October:
“Blockchain is coming everywhere, ready or not. Huge improvements in efficiency and transaction speeds, cost savings and enhanced security are on the menu, with significant disruption and new business opportunities likely to follow.”
My advice to business leaders everywhere: get smart as fast as you can about blockchain.