In 2008, the world was introduced to bitcoin, the world’s first cryptocurrency—decentralized digital currency. Since early 2017, bitcoin has exploded in popularity, raising the value of each bitcoin from $1000 per unit to $17,000 in less than a year. Bitcoin itself, however, wasn’t the only revolutionary technology to come out of the project. The blockchain, a new system for storing and updating data, was built for bitcoin, but has now expanded into the financial industry and beyond.
The blockchain is often referred to as a “digital ledger” system. It’s called the blockchain because each change creates a new record, a new “block” in the ledger. The system is decentralized, so the records are shared and exist in a whole system of computers, known as “nodes”. Because the system just adds a new record when a transaction or change is made, the data isn’t copied, it’s shared, making it much more difficult to falsify records and easier to track anomalies. With this new technology, many pundits believe that blockchain will not only transform the manufacturing industry, but also provide the tools and security needed to revive a number of manufacturing businesses and brands.
Curious how? Check out these 5 reasons.
- Additive Manufacturing/3D Printing
Manufacturing has seen the rise of 3D printing in the last few years, and it’s only going to become a larger part of the industry as time goes on. Since 3D printers rely on computer models that must be shared with manufacturers, there is an enormous risk of intellectual property theft during file transfer. On a centralized system, it’s difficult to verify which manufacturers and printers have access to the data. Using the blockchain, however, everything is logged so it’s easy to control who gets access to the file. It’s also possible to automate the process of tracking the use of the files per contracted quantity.
- Verifying Product Authenticity
Counterfeit merchandise is a significant issue, reducing trust in manufacturers and duping customers. With no way to reliably authenticate merchandise, counterfeiting has caused companies and customers problems for years. Blockchain technology in manufacturing won’t eliminate counterfeiting, but it can ensure that items can be verified as authentic during the manufacturing process. Each product is assigned its own unique ID, and supply chain partners scan and verify the product’s authenticity at each step in the process. This not only prevents fake products from hitting the market, it allows verification and transparency for both manufacturers and customers.
- Smart Contracts
Cutting out manual steps from the manufacturing process saves time and money, and also allows fewer opportunities for error or theft. Smart contracts are a blockchain-based method of executing contracts without requiring parties to manually take those steps together. The contracts are secure, neutral, and ensure accountability between the two parties. Once the contract is in the system, the process is automated and does not require one person to monitor it. In manufacturing, this can speed up deals and make the entire process run more smoothly.
- Managing the Supply Chain
Logistically, there are so many things that can go wrong in the supply chain. When a breakdown occurs in the chain, it has historically been very difficult to enforce accountability and find out what went wrong. Using the blockchain, every step in the process can be documented, allowing for greater transparency and accountability. If a faulty part is put into a product that is shipped to customers, it’s much easier to find out where in the supply chain the problem occurred using a distributed ledger system.
- IoT Security
The Internet of Things has huge potential in manufacturing, but security risks have been a major drawback for industry implementation. Not only is the blockchain a more secure method of identifying IoT devices, it is much quicker and could improve scalability for IoT in the manufacturing industry. This could also streamline sales of data collected using these devices, since the owner of the data could set the parameters about who would be able to purchase the data—then sit back and wait for a sale to come through. Though IoT is still in its infancy for manufacturing, these two technologies have the potential to work in tandem for improved operations.
Curious about manufacturing? Want to start your own apparel business and secure it with blockchain? Visit makersrow.com/plans.