Blockchain is making news headlines these days as the data structure that allows firms to create and share a digital ledger of transactions across a distributed network of computers. Using cryptography, blockchain allows each participant on the network to utilize ledger in a secure way without the need for a central authority. The innovative concept is being touted for its ability to save time, remove inefficiencies, and cut costs.
IBM is making a particularly big push into blockchain right now. Over the last few weeks the company announced a host of new partnerships and initiatives related to blockchain, including those focused on streamlining financial transactions and one aimed at easing companies’ “last mile” delivery challenges.
According to The Motley Fool’s Why IBM Is Betting Big on Blockchain, the company is working with the Bank of Tokyo-Mitsubishi UFJ to use blockchain for contracts between business partners. IBM is also teaming with China UnionPay to develop a blockchain-based system for sharing loyalty points between multiple banks, and recently inked a partnership deal with SBI Securities to test blockchain technology for a new bond trading system.
According to an IBM study, 15% of banks surveyed plan to have blockchains in commercial production by 2017, and 91% of banks are investing in blockchain for deposit-taking. The World Economic Forum estimates that 80% of banks are actively working on blockchain projects. “This rapid adoption has forced IBM to be aggressive in order to maintain its position as a major supplier of IT to the banking industry,” writes Timothy Green.
According to Green, improving supply chain efficiency is another area where blockchain could prove useful—an advancement that could positively impact global electronics buyers.
“IBM estimates that blockchain could generate more than $100 billion of efficiencies annually if applied to global supply chains—a staggering number,” Green asserts. “Both Toyota and the U.S. Postal Service are currently looking into using blockchain for exactly that purpose.”
Walmart has also jumped into the blockchain game. In November, IBM teamed up with the large retailer to use blockchain to track the former’s pork supply chain in China. This particular blockchain implementation tracks pork as it moves from the farm to the shelves.
Blockchain is also being tested as a way to track packaged goods in the U.S. as well, writes SiliconANGLE’s Duncan Riley in "Walmart and IBM test blockchain for custom supply chain tracking." “The technology is a step forward from current tracking methods such as barcodes and RFID tags.”
Also on the supply-chain front, IBM recently began working with Singapore startup FreshTurf to develop a network of storage lockers that are connected via blockchain. Focused on solving companies’ “last mile delivery” challenges (i.e., bridging the gap between the last distribution point and the final customer delivery point), the two entities want to apply blockchain to tracking delivery shipments, with dedicated storage lockers linked up via a distributed ledger platform, according to CoinDesk’s "IBM Blockchain Pilot Seeks to Solve 'Last Mile' of Delivery."
“The project is an early one to emerge from IBM’s BlueMix garage, a global network of innovation hubs that provides a foundation for startups and existing companies to experiment with blockchain and other technologies,” Stan Higgins writes. “The BlueMix network forms part of IBM’s broader strategy for blockchain applications.”
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