When it comes to applications of blockchain technology, it seems that supply chain management is leading the way in terms of being the first to “go live”. There have been many successful pilots, proof of concepts and early roll-outs in this sphere and the future is looking bright. But whilst blockchain projects are successfully demonstrating how data sharing protocols, smart contracts, and cryptographic traceability can streamline customs processing and increase transparency, the biggest change is yet to come.
The freeing of manufacturing
The Internet of Things, 3D printing and other automated technologies have the power to finally free manufacturing from its traditional geographical constraints. In this sector blockchain technology can come into its own by enabling a new paradigm of decentralised, on-demand production, as well as forcing a levelling of the global economic playing field.
But to reach this new paradigm, advancements are needed in all of these technologies. It will require manufacturers to adopt a more open-minded approach when it comes to increasing the balance between competition and collaboration, but blockchain can also play a part in this.
At the moment, shipping, trading, and big manufacturers view their supply chains from a proprietary point of view. They talk of their supply chains that can only be joined after the pre-certification of companies and a certain level of trust is ascertained.
The end of cliques
These businesses inevitably favour permissioned blockchain systems with the decentralised ledger either being managed by a single, centralised party or collectively by a group of pre-established suppliers. This creates a clique or a club-like situation which doesn’t work as well as it should.
Soon additive manufacturing can finally become a big thing and clients will be able to customise their orders. In fact, manufacturers need to be on-board on what 3D printing provides, so they can serve their clients quickly, and anywhere in the world. Many of these providers will need to be on board quickly and without having the time or opportunity to establish bonds of trust.
In cases such as this, a permission in blockchain could backfire as the instinct of the validator would be to exercise their standard gatekeeping powers to protect their interests against those of their competitors. This could lead to instances of missed opportunities and of course, missed revenue.
On the other side of the coin are the enterprises that take a more open and relaxed approach to their business partnerships. They may find that a permissionless system gives them an advantage over the permissions supply chain cliques.
If 3D printing machines are able to be uniquely identified with cryptography, and if their transactions, data and performance can be stored in a notarized, permissionless, open-access blockchain, then users could enjoy a more fluid onboarding process which makes it easier to respond to customer demand as and when it arises.
Obviously, all of this requires significant technological advancements that will enable permission in blockchains to become more scalable as well as encouraging the development of payment channels and interoperability protocols. It will also have to create standards for the certification of in-built chips so that interconnected printing machines and other devices are able to provide the data that the system needs to depend on.
For now, this scenario exists only in dreams and imagination, but the thought experiment is useful as it paints a very different picture of the world economy that will create a whole new set of challenges.
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